Consumers to be helped when picking flexible friends
08 December 2003
The Government is to simplify credit card information so that consumers can compare one lender with another.
Plans set out in a new white paper are expected to force lenders to use a standard layout for credit information. This should allow consumers to make simple comparisons between one lender and another more easily, although other efforts are expected to be necessary.
The move follows surveys that found many people have little understanding of even the most basic financial terms used in adverts. Many more also felt they needed more information on their rights as consumers.
Plans to establish a system for comparing information may be backed by a new gateway telephone service for consumer advice. This will connect people to appropriate debt advice organisations when people find themselves in financial trouble.
Major lenders have recently admitted to Parliament that credit cards are expensive, and that interest rates for store credit did not fall with Bank of England interest rates. Concerns were also raised that too few companies dominate the provision of store cards.
The white paper is unlikely to propose a top limit to interest rates. However, new powers are expected to be given to the Office of Fair Trading to scrutinise and punish lenders.
An overhaul of consumer credit law will be the first such effort in decades. It comes as the level of personal debt in the UK rises to record levels and interest rates start to rise again after years of falling.
Thirty years ago there was just one credit card available in the UK. There are now more than 1,000 and more than 200,000 licensed lenders.