Money News: Interest rates 20% 'too high': plastic made to walk the line

Statements for store cards with annual percentage rates (APRs) of more than 25 per cent will have to carry a warning to consumers that they can get cheaper credit elsewhere.

The new rule is part of a package of measures ordered in the final report of the Competition Commission (CC) following an inquiry into the lack of competitive pressure in the sector.

The CC found that store card APRs were, on average, between 10 and 20 per cent "too high" - compared with what they should have been had they reflected providers' costs - during the period from 1999 to 2003 (the gap is slightly smaller if extended to 2005).

As a result, consumers were being ripped off by at least £55m a year, the CC said.

To help rectify this, monthly bills must now display notices of cheaper credit available elsewhere; give clear information about the impact of making only minimum monthly repayments; and offer the option to pay by direct debit.

Card insurance, taken out to cover repayments in the event of illness or unemployment, must also be offered separately, the CC ruled.

Today, more than 11 million store card holders owe more than £2bn. Although store card retailers are plentiful, the market is dominated by a handful of companies, including GE Consumer Finance UK, HSBC and Creation Financial Services.

The changes to the way the cards are sold should be in place within 12 months.

Card fraud: Consumers start fingerprint trial

Co-op shoppers in Oxford can now pay for their groceries with a scan of their fingerprint.

The trial "pay and touch" service launched last week in three stores - part of the Midcounties Co-operative - lets consumers link an electronic scan of their fingerprint to their bank account.

To pay for goods, you simply pass your finger across the scanner; there's no need for a pin.

Although the number of shoppers who have signed up for the free scheme has yet to be revealed, a similar system in the US has more than two million users.

Meanwhile, the arrival of chip and pin technology has helped reduce fraud from counterfeit and lost or stolen cards by nearly £60m.

According to figures from Apacs, the payments clearing body, fraud from skimmed or cloned debit and credit cards fell by a quarter to £96.8m last year.

For stolen or lost cards, cases of fraud dropped by 22 per cent to £89m, from £114.5m in 2004.

The biggest fall was in fraud by crooks intercepting cards in the post. Because of the difficulty of using cards without a pin number, "mail non-receipt" decreased by 45 per cent to £40m.

But fraud using cards on the internet, telephone and for mail order - known as "card not present" (CNP) - rose by a fifth to £183.2m to become the biggest source of plastic crime.

Banks and lenders are now looking at how to counter this growing threat of criminals redirecting their card fraud efforts elsewhere.

Possible measures include development of a handheld chip and pin card "reader" - potentially employing wireless technology - to be used before CNP transactions, and promoting greater consumer awareness of the need to protect card details.

Borrowing: Rates held as house prices look up

The Bank of England has kept interest rates on hold at 4.5 per cent for the seventh month in a row.

The decision came as no surprise to the markets. City analysts had expected a contradictory mix of factors - including indebted consumers, inflationary pressure from rising household bills and steady house price growth - to lead to the decision to leave rates where they are.

Property prices rose by 1.4 per cent in February, according to the Halifax. And Martin Ellis, the mortgage lender's chief economist, said annual house inflation was now running at 5.5 per cent.

"The combination of an improving economic outlook, low interest rates and high employment will continue to underpin a healthy level of housing demand over the next few months."

News
i100 In this video, the late actor Leonard Nimoy explains how he decided to use the gesture for his character
Arts and Entertainment
Secrets of JK Rowling's Harry Potter workings have been revealed in a new bibliography
arts + ents
News
Robert De Niro has walked off the set of Edge of Darkness
news The Godfather Part II actor has an estimated wealth of over $200m
Arts and Entertainment
Fearne Cotton is leaving Radio 1 after a decade
radio The popular DJ is leaving for 'family and new adventures'
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: HR Benefits Manager

    £40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

    Recruitment Genius: Office Manager / Financial Services

    £30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

    Jemma Gent: Year End Accountant

    £250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

    Jemma Gent: Management Accountant

    £230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

    Day In a Page

    HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

    Scientists hail daily pill that protects against HIV infection

    Breakthrough in battle against global scourge – but will the NHS pay for it?
    How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

    Time to play God

    Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
    MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

    MacGyver returns, but with a difference

    Handyman hero of classic 1980s TV series to be recast as a woman
    Tunnel renaissance: Why cities are hiding roads down in the ground

    Tunnel renaissance

    Why cities are hiding roads underground
    'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

    Boys to men

    The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
    Crufts 2015: Should foreign dogs be allowed to compete?

    Crufts 2015

    Should foreign dogs be allowed to compete?
    10 best projectors

    How to make your home cinema more cinematic: 10 best projectors

    Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
    Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

    Manchester City vs Barcelona player ratings

    Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
    Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

    Monaco: the making of Wenger

    Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
    Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

    Chris Gayle: The West Indies' enigma

    Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
    In Ukraine a dark world of hybrid warfare and murky loyalties prevails

    In Ukraine a dark world of hybrid warfare

    This war in the shadows has been going on since the fall of Mr Yanukovych
    'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

    Homage or plagiarism?

    'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
    Broadchurch ends as damp squib not even David Tennant can revive

    A damp squib not even David Tennant can revive

    Broadchurch, Series 2 finale, review
    A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

    Inside the mansion of Germany's 'Bishop of Bling'

    A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower