Government proposes crackdown on credit card companies

”Government

As part of a crackdown on credit card companies, the Government is warning credit and store card firms to “clean up their act.”

The latest proposals follow other restrictions on credit card practices introduced earlier this year after a credit card summit organised by the Government last November saw card companies agree to a set of “fair principles”.

One of the main issues was for credit card companies to stop increasing interest rates when a customer fell behind with their repayments.

Meanwhile, the Government’s latest proposals, which are being put out to consultation by the Department for Business Innovation and Skills, include changing the order of priority for credit card repayments, so that the most expensive debts are paid off first.

Furthermore, the practice of raising borrowers’ credit limits without their prior consent will be banned.

Minister for Consumer Affairs, Kevin Brennan, said: “Card companies have to get their act together and do more for consumers.

“My opinion is clear, the current relationship between card companies and consumers cannot go unchallenged. We need to put the customer back in the driving seat,” added Mr Brennan.

Commenting on the proposals, the UK Cards Association, the body which represents UK card issuers, said: “We look forward to widely publishing our own response to the many ideas put forward. We will continue to support change where there is evidence to show that it is in the best interests of consumers. We expect the government to do the same.”

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