New measures to tackle
A raft of measures designed to curb irresponsible bank lending and help protect consumers have been unveiled by the Government.
The plans, which are the subject of a White Paper, include a ban on controversial credit card cheques and the creation of a new body that will help consumers get their money back.
Credit card cheques are similar to personal cheques but banks often charge users higher interest and a handling fee for using them. In 2006 the Office of Fair Trading estimated that consumers could be paying up to an extra £57 million a year in interest and charges by using the cheques rather than a credit card.
The Paper also calls for a review of high-cost credit such as payday loans and doorstop selling, as well as an evaluation of credit card and store card charges.
Under the proposals, customers who have been ripped-off by businesses will be able to receive assistance from a Consumer Advocate, which will represent dissatisfied consumers in court. It is thought the new Advocate will be formed by early next year.
Commenting on the shake-up, Larry Whitty, chairman of watchdog Consumer Focus, said: ‘These are particularly tough times for consumers and these measures will give people stronger rights to take action, backed by tough legislation and a powerful Consumer Advocate.’
However, the British Retail Consortium argued that the new position should ‘not just be a gesture’ and the Advocate should offer practical, independent advice.
Recent figures from the Bank of England show that