Select Committee on Treasury Second Special Report



Letter to the Chairman of the Committee

Your Committee's report, published on 17 December, contains a number of recommendations that directly or indirectly concern the OFT. I am writing to let you have our response to these recommendations and to that end enclose a paper which sets out our position on each of them.

I want to say first that we very much welcome the attention which the Committee has focussed on the transparency of costs of credit cards. The OFT is a firm supporter of transparency: for markets to work well consumers must be able to exercise well-informed choice. And it is informed choice that adds impetus to competition.

Transparency has two aspects. The first is to combat bad practice, and on this we have taken action against businesses misleading consumers. The second aspect is to promote good practice, and here we are working with others—notably DTI and the industry—to improve the practical ways that information is presented to consumers.

Of key importance in the credit market is the need to ensure that consumers have the right information at the time that they make key decisions and in a way they can easily understand. To help identify how best this might be achieved, we have undertaken empirical research into the information needs of consumers when they are contemplating, acquiring, and using credit cards. The results of this research will be available soon. We will make them public. These findings will also inform our response to the Consultation Paper published by DTI on 8 December which set out proposed reform of advertising and form and content regulations.

If you are your Committee colleagues would find it helpful to discuss the enclosed paper please let me know. We are also, of course, happy to attend another oral evidence session before the Committee if that would be helpful.

John Vickers


Office of Fair Trading

20 February 2004

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