Credit cards under fire

An influential committee of MPs has urged the credit card industry to give consumers clearer information about the deals they are offering.

11:21 04 February 2005

An influential committee of MPs has urged the credit card industry to give consumers clearer information about the deals they are offering.

The Treasury select committee has been investigating the consumer credit business for almost two years. Its second report was published today, following on from 2003's first report.

The new report calls upon companies to share more information to prevent customers running up huge debts; to provide more clear information about penalty charges; to develop an industry-wide method of calculating interest; and to end the practice of sending out unsolicited credit card cheques.

The committee is also calling for the industry regulator, the Financial Services Authority, to examine the sale of payment protection insurance alongside credit cards.

The 2003 report called upon the industry to introduce summary boxes on credit card promotional material, explaining in simple terms the headline points about the terms on offer. These have recently been introduced.

Committee chair John McFall acknowledged that the industry has moved forward since the first report, but warned that there is still much to do.

Speaking at the launch of the second report, Mr McFall warned: "Consumers still deserve a better deal from credit card companies...they have some way to go to make their deals easier to understand and compare."