A Bill to prevent excessive charges or fees from being levied on consumers; and for connected purposes
The aim of this Bill is to make provisions which would protect bank customers and other borrowers from excessive charges or fees. The Bill would require that any default charges in a consumer contract with a bank must be 'fair and proportionate'. Specifically, it would limit charges and fees to no more than 2.5 per cent of the actual value of the default or failure per loan or account. This would apply to agreements regulated under the Consumer Credit Act 1974 (loans) and bank account overdrafts. The Bill would apply to the whole of the UK.
House of Commons
3 November 2009
This Bill would cap default charges on consumer loans and overdrafts at 2.5% of the amount in default and require such charges to be fair and proportionate. It applies to loans regulated under the Consumer Credit Act 1974 and to bank overdrafts, UK-wide. If enacted, it would make default charges more predictable and reasonable for borrowers.
The bill is at the Second Reading stage in the House of Commons, meaning it has been introduced and debated but has not yet moved to committee scrutiny.
Generated 21 February 2026
This Bill was presented to Parliament on 29 April. This is known as First Reading and there was no debate on the Bill at this stage.
This Bill was on the Order Paper for a Second Reading on several Fridays before being dropped by its sponsor, Mohammad Sarwar.
No recorded votes for this bill yet.
