The Commerce Commission has begun investigating banks over the level of fee they charge for late payments on credit card bills.
The commission is giving no details but a spokeswoman said fees were being checked against the Credit Contacts and Consumer Finance Act, which says late payment fees
must be "reasonable".
According to media reports, payments have jumped from about $10 seven years ago to up to $49 today, on top of nearly 20 per cent interest rates for most credit cards.
Most banks appear to charge around $25 a month for missed minimum payments, although Bank Direct charges $15.
BNZ was reported to have late payment fees of between $25 and $49, but a spokesman said that was incorrect and the fee was only $25.
The commission has already successfully sought compensation from a number of banks or credit companies over non-disclosed fees on overseas transactions.
It has also taken court action against the industry for alleged price-fixing in relation to interchange fees, which are paid by retailers for each credit card transaction.
The Banking Association had no comment to make, but Banking Ombudsman Liz Brown said her office had not received many complaints about late payment fees .
"We do have complaints occasionally, but I wouldn't say they are the fee which causes the most complaints to us."
People tended to complain about the general level of transaction fees, and honour and dishonour fees, she said.
The Family Budgeting Service criticised the fees for putting people deeper into debt and asked whether it was fair when payments were often just a few days late.
Consumer's Institute chief executive Sue Chetwin applauded the investigation .
"At the end of the day, you do need to be careful with your credit card and there is some personal responsibility for not getting involved in that. But nevertheless, these sorts of charges are pretty high."
- NZPA
