Ministers want credit card crackdown
By politics.co.uk staff
The government is seeking a fundamental shift in the relationship between credit and store card companies and their customers.
Consumer minister Kevin Brennan called for a shift to put consumers “back in the driving seat” as the Department for Business, Innovation and Skills launched a consultation proposing changes in the law on repayment policies.
The government wants clearer terms and conditions from companies and is considering forcing them to make clearer when they change interest rates.
It proposes banning the practice of increasing credit limits without prior consent, placing restrictions on increasing the interest rate on existing debt and raising the minimum monthly repayments levels to encourage people to pay off their debt faster.
“Consumers have a real responsibility to manage their finances properly, but they also have a right to clear information to enable them to do that,” Mr Brennan said.
“Consumers should not feel each month as if they’ve been exploited or disadvantaged.”
The measures come in addition to guidelines on irresponsible lending practices which come into force in January. These will force lenders not to encourage borrowers to increase existing debt.
