Introduce legislation to cap fees associated with declined direct debit and late payments so that do not exceed the administrative cost of handling the late payment. We also call on the Government to require grace periods and fair payment alternatives for those unable to pay.

In our view fees associated with declined or late payments are automated charges that often far exceed the administrative cost of handling the late payment, and disproportionately affect people and small businesses in financial difficulty. We believe that such fees increase arrears, worsen debt, and trap vulnerable customers in a cycle of charges instead of encouraging payment. The Government should review the regulatory oversight of such fees to prevent these charges being used as a revenue stream. We think that in a cost-of-living crisis, allowing firms to profit from failed payments is unfair and counterproductive.