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Credit card industry to draw up proposals

Credit card industry to draw up proposals

Category: Credit cards

Updated: 25/05/2017
First Published: 28/11/2008

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The industry was called in to meet with business secretary Peter Mandelson and consumer affairs minister Gareth Thomas after findings that disproportionately high interest rates are being charged.

Of particular interest was the issue of risk-based re-pricing, which has seen rates increased significantly for certain groups after companies decided their risk levels had changed.

A joint statement revealed that firms are to report back in two weeks with new principles, which will "address issues such as proportionality, frequency and transparency".

"The purpose is to help borrowers manage their debts during the downturn," the statement added.

A commitment was also made to give a 30-day grace period before beginning collections activity when a debt agency notifies a company that a particular consumer is struggling.

Moneyfacts.co.uk recently found that the average interest on credit cards is now 17.2 per cent.

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