The government is reviewing the £70 cap on recovery fees, suggesting it may be higher than justified, and is seeking further evidence through consultation.

The MHCLG considers the high profits a sign of market imbalance and is exploring whether current fee caps are appropriate, seeking more evidence to justify them.

The British Parking Association disputes the government's profit calculations, claiming the figures are misleading and that the fees are intended as deterrents rather than profit sources.

The government aims to improve industry standards and transparency through a new private parking code of practice, with a review of fee caps, including the £70 recovery fee, currently under consideration.

Debt recovery agencies charging drivers up to £70 per parking ticket have faced scrutiny, especially since a planned ban on such fees was withdrawn after legal challenges from parking companies.

A government report reveals that these companies are making an average profit margin exceeding 60%, which the Ministry of Housing, Communities and Local Government (MHCLG) considers a market failure.

The government notes that if the current payment rates stay stable, debt recovery agencies would break even with fees of around £26 per ticket, indicating that current charges are inflated.

Industry critics, including the AA and RAC Foundation, argue that profit margins are disproportionately high, calling for stricter regulation and greater transparency in the sector.

The high profit margins, approximately 63%, are comparable to those of innovative companies, despite the sector providing basic services like payment plans, which suggests excessive market control.

The AA criticizes the 63% profit margin as excessively high for the services provided and advocates for regulation to ensure fairness, citing overzealous practices by some private parking operators.

A consultation is ongoing on the proposed code of practice, which seeks to regulate the sector better and increase transparency, including reviewing the fee cap.

The RAC Foundation links high profit margins to the increasing number of private parking firms buying vehicle keeper records from the DVLA, which has driven demand for debt recovery services.

Concerns have been raised that private parking operators rely heavily on debt recovery firms, sometimes transferring cases for minor charges, which contributes to the sector's high profitability.

Recent data shows a 24% increase in private parking tickets issued in the UK between April and June, totaling 4.3 million tickets, highlighting the sector's growth and profitability.

The government is working to enhance transparency and standards in the parking industry, with a forthcoming response on fee caps and regulations.