Postal backlog spells late payment charges

LONDON, Oct 12 (Reuters) Thousands of consumers could soon be hit with late payment charges on bills and credit cards, following the postal strike.

Although deliveries resumed on Wednesday after a 48-hour walk-out by Royal Mail workers, a backlog of over 60 million items has built up.

Members of the Communication Workers Union (CWU) are due to walk out again on Monday in the first of a series of one-day strikes over pay, pensions and shift changes.

The disruption could result in swingeing penalties for late payments.

''Those borrowers who put cheques in the post to their lenders over the last 10 days or so stand to incur a late charge as their remittances languish in the Post Office's overflowing depots,'' said Richard Brown, chief executive of price comparison service Moneynet.co.uk.

He said credit card companies and utility firms, some of which also levy late payment penalties, stood to land a ''huge windfall from others' misfortune'' and urged those who think they might be hit to contact the company concerned.

''With little or no deliveries this week and a huge backlog of post to be dealt with, millions of people could be affected unless they pick up the phone to their lender and stamp out the possibility of being treated as a bad payer,'' he said.

Barclaycard, Britain's biggest credit card issuer, said those who paid their bills late would automatically be hit with penalties.

''We can't stop the system from applying charges across the board,'' said a spokeswoman.

She urged those who think their payment or statement might have been delayed due to the strike to contact the company.

''We are being flexible with people where there is a genuine delay as a result of the postal strike,'' she added.

The Office of Fair Trading has forced providers to cut credit card default charges to 12 pounds or less and is now investigating banks' pricing structures in a wide-reaching study that is due to be published by the end of the year.

Industry commentators have said a wider crackdown on charges could herald an end to ''free banking'' as companies try to recoup lost revenue.

REUTERS PD RK1800