The Office of Fair Trading has discovered that European credit card companies are using accounting policies and imposing charges on customers described by the regulator as being of "questionable validity," a Treasury-select committee of MPs said last week. The regulatory body has found that some companies appear to be undertaking practices that breach terms in consumer contracts.

The Office of Fair Trading is consulting issuers, including MBNA Corp., Barclays Bank plc, HSBC and The Royal Bank of Scotland, regarding late fees and credit limit surcharges. It believes these charges are disproportionately high, and need to be reduced in order to be fair. In the past, credit card companies have been reluctant to disclose such charges, said market sources.

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