Consumers attack Government over its response to credit card market inquiry

The Government came under attack from consumer groups yesterday for refusing to endorse the Treasury Select Committee's recommendations on standardising credit card charges and full sharing of account data to stop people running up huge debts.

The Government came under attack from consumer groups yesterday for refusing to endorse the Treasury Select Committee's recommendations on standardising credit card charges and full sharing of account data to stop people running up huge debts.

The Labour-dominated committee, chaired by John McFall, is investigating the credit card market against a background of mounting consumer debt and stories of highly indebted people committing suicide.

Britain's leading banks and other credit card issuers have come under fire from the committee for using different ways of calculating credit card charges, confusing consumers. But the Government refused to endorse the Committee's call for a single calculation method yesterday, saying: "We are concerned that standardisation would restrict or even eliminate consumer choice. Not all borrowers want to use credit in the same way."

Emma Bandey, of the consumer group Which?, said: "The Government seems to have fallen for the industry line that a standard way of charging interest will limit competition - in fact it will mean providers can compete on cost and consumers can choose the cheapest card for them."

The committee had urged more sharing of consumer data between banks to try to stop people running up huge debts on cards spread across different lenders. The Government highlighted problems with accounts where customer consent was not obtained at the time the account was opened, saying new laws were needed. Ms Bandey said: "The Government seems reluctant to give the green light to full sharing of historical credit data. Surely it's logical that lenders can only make responsible credit decisions when they have access to all information on their potential customers?"

The Government pointed to the new Consumer Credit Bill, which tightens credit card lending guidelines and has been passed through the Commons.