Press Release
MP DEMANDS - Time Up For Credit Card Rip-Offs
It is time credit and store card companies cleaned up their act, that was the clear message as the Government launched a consultation exercise on changes to the law covering lending finance or credit. Their aim is to ensure that consumers get a fair deal and have access to the information they need to make well-informed decisions about their personal finances.
Tom Clarke MP said:
‘Some of the repayment rules for credit and store cards are not working in the best interests of consumers and can cause those already in financial difficulties to get deeper into debt. This can’t continue. During this difficult economic time I want to do what I can to help local people manage their finances and cope with repaying their debts. What I hear about time and time again are complaints from people about unfair practices and rip offs’.
‘That is why during the Summer Recess I conducted my own consultation exercise amongst one thousand households in my constituency. The result was loud and clear the public believe with a passion that they are being ripped off by financial institutions and many people feel powerless and helpless to deal with excessive interest rates added to their already spiralling debt’.
Mr Clarke explained the plight of consumers when he added: ‘Whether its over the top charges in credit card bills, credit repayments or the high cost of credit on things like store cards, it is clear that something needs to be done to help consumers’.
The MP welcomed the tone of the Government’s consultation, ‘I was pleased to be briefed by Ministers that credit and store cards are going to be forced to end rip off charges. New plans will mean that companies have to raise the minimum monthly repayments to encourage people to pay off their debt faster – minimum payments now too often leave people with debts for a lifetime’.
Mr Clarke continued: ‘there is likely to be a ban on unsolicited credit card cheques and the practice of increasing credit limits without prior consent. There will be restrictions on increasing the interest rate on existing debt. And we will change the rules so that the most expensive debt on your credit card is paid off first - at the moment most credit card companies make you pay off the cheapest debt first’.
‘I am in confident mode on these issues’, said Mr Clarke, ‘because I know the pulse beat of my constituents. I will support moves to force credit and store card companies to give people a fairer deal and prevent spiralling debts. What seriously concerns me most are the interest rates being increased without proper explanation. Consumers using their cards responsibly and making payments on time should not pay the price for excessive risk-taking by financial institutions. So I will push for the Government to ban and restrict the re-pricing of existing debt’.
The MP concluded: ‘Of course people have a responsibility to manage their finances properly, but they also have a right to clear information to enable them to do just that. Consumers should not feel each month as if they’ve been exploited or disadvantaged. It is not right that some card companies have complex and confusing terms and conditions. Too often they leave people confused. Or, they increase interest rates without a proper explanation, which is completely and utterly unfair on consumers’.