RESPONSE BY THE OFFICE OF FAIR TRADING
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 othersnotably DTI and the
industryto 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.
Office of Fair Trading
20 February 2004