Credit and Store Card Review
The Labour government recently secured an agreement with credit and store card companies which is could save consumers as much as £300 million per year.
The agreement was reached following feedback from thousands of customers responding to a consultation on credit and store cards.
It has five main elements that will protect those consumers who are vulnerable or at risk of suffering from financial difficulties:
• Right to repay: Repayments made by consumers will go to paying off debt with the highest interest rate first.
• Right to control: Consumers will have the right to refuse an increase to their credit limit or reduce their credit limit.
• Right to reject: The amount of time consumers have to reject increases to their credit limit or interest rate will be extended.
• Right to information: Consumers at risk of financial difficulty will be required to be provided with clear information about the consequences of late repayments and increases to their credit limit or interest rates – including the right to reject.
• Right to compare: An annual statement that allows for easy cost comparison must be provided by the companies.
This agreement comes after other measures designed to help and protect consumers have been introduced by Labour, including giving consumers access to their credit ratings for free or for a charge of £2 from June 2010, stronger protection under the lending code and for those suffering the most serious financial hardship.
