New legislation to crack down on credit card debt
The Government is proposing to introduce new legislation which will prevent credit card companies from raising credit limits without this being specifically requested by a customer.
The laws aim to help crack down on spiralling
levels of personal debt in the
Government ministers are also seeking to ban companies from sending unsolicited blank credit card cheques, which often carry higher interest charges and do not offer the same protection as credit cards in the event of faulty goods.
Gareth Thomas, Consumer Affairs Minister, said, 'We are concerned that people may be tempted to borrow irresponsibly if credit card companies increase borrowing limits without this being requested by customers, or send out unsolicited credit card cheques'.
The news follows the publication of recent research which suggests that the average Briton has lost £40,000 as a result of the credit crunch, with a combination of falling house prices and a downturn in the stock market responsible for the loss of around £1.9 trillion of household wealth.