Coalition seeks views on bank and credit charges
Sunday 17 October 2010
The Government has launched a consultation on credit card interest rates, loans and bank charges.
It will also evaluate consumer credit law and insolvency, including the role of "debt management" firms.
The Office of Fair Trading recently threatened to put 129 of these firms out of business unless they improved the way in which they treated consumers. Ever since insolvency laws were relaxed in 2005, the numbers becoming insolvent have increased dramatically.
"I want to encourage both customers and lenders to take responsible decisions and to strengthen protection where necessary, particularly for the most vulnerable," said Consumer Minister Ed Davey launching the review. "If things go wrong, people face a confusing array of debt remedies, so I also want to examine how the existing insolvency regime can be made to work better."
One option being discussed is a seven-day, cooling-off period on store cards, which often charge interest rates in excess of 30 per cent.
Another possibility is requiring credit card providers to send customers electronic statements so that they can more easily compare competitors.
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