Retreat forced on M&S over store card

Marks & Spencer was reprimanded yesterday for breaching trade regulations while selling its new credit card.

The retailer was criticised by the Office of Fair Trading three days after the launch of its &More credit card, which is a combined credit and loyalty card.

Many of its 5 million store card holders received a letter from the company's financial services division informing them that unless they objected, their current card would be replaced by &More cards. But the OFT highlighted yesterday that it was an offence under the Consumer Credit Act to send a credit card to consumers unless it has been requested in writing.

M&S argued that it was not breaking the law because it was sending out a replacement as part of a variation of an existing agreement and was not supplying a new card.

However, the OFT ruled that the store did not have the right to change one type of card into another without the permission of the owner.

In the light of the ruling, M&S agreed yesterday to change its plans and alert customers being sent the &More credit card that they would be able to keep their existing store cards unless they instructed otherwise. The ruling aimed to stem the growth of "inertia" selling to consumers, during which consumers receive products they have not requested, according to John Vickers, the chairman of the OFT. "In this case Marks & Spencer Financial Services has agreed to take practical steps so that consumers will move from store card to credit card only if they positively make that choice.'

The &More card was unveiled on Monday as part of a plan for the company to rebrand its financial services division as M&S Money. The move was designed to help M&S claw back business lost to the leading credit cards, while also offering customers the convenience of one card instead of two.