Select Committee on Treasury Second Special Report



Recommendation 43: To date there has been in some cases a cosy arrangement between the store card providers and the stores involved to prevent customers from gaining the full facts about their cards. The fact that this has been legal serves only to underline the urgency of reforming existing consumer credit legislation.

Recommendation 44: Customers need to be aware of the extremely high interest rates charged [on store cards]. Some progress has now been made in improving transparency, but further work remains to be done, in particular concerning the size of the print giving the APR (which should be minimum 18pt in all literature) and the provision of further information on monthly statements, especially the interest rate that applies."

4.1  The proposals for new rules on consumer credit advertising will apply to store card marketing material. They will require that leaflets that describe any one of a number of key financial attributes of a store card will also have to include the APR (or in some cases the typical APR), and that the APR will have to be twice the size and more prominent than any other financial information (except the actual interest rate to be applied).

4.2  The Government is pleased to note that store card providers will adopt the Summary Box approach by 31 March 2004. Store cards will also have to conform to the requirements of the DTI's proposals on the form and content of agreements for both pre-contract information and information on the agreement itself when these come into force.

4.3  The new primary legislation will include a requirement for lenders to provide regular statements. The legislation will also cover what information should be provided on the statement.

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