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Malcolm Bruce: Yes, but there would be a reasonableness test. I agree with what I anticipate the hon. Member for Tewkesbury (Mr. Robertson) would say at this point. I want flexibility and choice in the marketplace. I am certainly not against special offers or inducements. A genuine offer of 0 per cent. interest for six months is a valuable commodity, provided that the price of a product is fair. If a person is buying a car for a given price and has one offer involving paying 0 per cent. interest for six months and another offer that would lead to charges immediately, one deal is incontrovertibly better than the other. I would not want to do anything
 
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to close such options. All I am asking is for the providers of credit to take reasonable steps to ascertain people's circumstances, thus protecting them from their lack of responsibility or self-control. I qualify that requirement with the words "reasonably" and "inadequacy", which are used in the amendment.

I think that the Minister will acknowledge that the expansion of such credit and the increase in bankruptcies, default and personal debt has much to do with the fact that it is excessively easy to access unsolicited credit. Such credit was not available 30 years ago. Credit was hard to come by then, not least because we had credit squeezes when the Government made things more difficult. I do not think that any of us wants to go back to those days, but we want a little discipline. Frankly, the providers of credit are the people best able to achieve that, rather than the Government or a third-party regulator. We simply require a reasonable test of how people should pay for credit. People should also receive advice on the products that they require. Why should they pay credit card interest rates when they could pay bank loan rates? It is distasteful that banks encourage their own customers to take credit on credit cards when they could offer cheaper credit through other products.

I imagine that the Minister will say that my amendment would have the disadvantage of qualifying the unfairness test, as he has said about other amendments. I understand that, but I hope that he accepts that my amendment is drafted in the spirit of many of the findings of the Treasury Committee. The Committee is not hostile to the expansion of credit or the availability, variety or flexibility of products, but it is worried that many people find themselves in serious financial distress because credit is too easily available and the providers of it do not determine responsibly whether people can afford it. They do that because they assume that they will get their money back from most people by using ruthless methods and making people's lives a misery, so they decide that the odd default will not matter given that the vast majority of people will struggle, but pay. However, for such people, the glamorous offer of credit that was supposed to enhance their quality of life leads to long-term misery. Surely we do not wish to encourage such a credit regime.

Chris Bryant: As was the case when we debated an earlier group of amendments, I wholeheartedly support the aim of amendment No. 21. I said in Committee that we must remedy a series of mischiefs in the market. It is true that credit card companies and other lenders wish to perpetuate a cycle. They want someone who has one credit card and pays it off every month to choose not to pay it off every month and thus start to accumulate charges. They want people with only one credit card to end up with several, and hope that those who have several cards will take out a personal loan secured against their home. The process is designed to increase the amount that people borrow and the length of time for which it is borrowed. The aim is for the lender eventually to provide a person with a secured loan so that it knows that it will not be out of pocket.

Although the vast majority of us understand the market, accept that caveat emptor is a good principle and are aware that people should appreciate that there is an onus on them to attempt to understand the precise
 
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nature of a loan agreement before entering into it, there is none the less such competitive stress in the market at present that pressure exists on all businesses to perpetuate and increase that cycle. In many parts of the country it is an entirely virtuous cycle, but in some parts it ends up as a vicious cycle into which individuals and families can all too easily fall because they do not understand either the nature of the agreement or whether they can afford the debt. We all know of individuals and families in our constituencies who have ended up in terrible difficulty for all sorts of genuine and complex reasons—not for devious reasons or because of their fecklessness. Debt can place significant stresses on families and individuals.

The amendment would go some way towards addressing the mischief of not only indiscriminate marketing—all marketing is indiscriminate to a degree because it is pumped out to everyone—but indiscriminate direct mail marketing. It is the stuff that lands on someone's doorstep with no check having been made on who that person is. I mentioned in Committee that I received correspondence from HFS. The letter was headlined "Debt Busting Loan". I do not understand the concept of a debt-busting loan; it seems to be a debt-increasing loan to me, but clearly the approach works. HFS sent me another letter. The first was sent to my apartment in London and the second to my house in Wales, to ensure that I got the message that I could take out a loan and that it had already approved a loan. I had to answer only a few questions, and not a question about the amount that I earn every year or one about other debts. One question was whether I was 18 years of age. I was slightly flattered—well, very flattered.

If an organisation is sending a letter asking someone to prove that they are over 18, by definition it does not know whether the person is over 18. I believe that that contravenes the banking code of conduct, and in turn suggests that the organisation should not be marketing to people who are under 18. It suggests that it is feckless about establishing to whom it is marketing. It may be legitimate to use poster boards or to advertise on television or radio—obviously that type of marketing is less discriminate—but with direct mail, the organisation should be required to ensure that it has established who it is marketing to.

3.30 pm

There is also the process of credit card pushing. There is a pre-approved credit card application form. It is necessary only to state, "Yes, I want it," and sign it. That having been done, the individual has got it. Often, the company has already sent out the card through the post.

Credit card pushing has become endemic. Someone might go to Selfridges on the last day of the sales. They are told that if they take out a store card on the spot, they will get 10 per cent. off their purchases on that day. The individual thinks that all they are doing is getting a store card. A week later, they will be sent a pre-approved credit card as well.

If someone takes out a Tesco points card, likewise a week later they will be sent a pre-approved Tesco credit card application form. The process of constant pushing
 
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of credit cards—many people say, "I might as well have another one, what harm does it do?"—means that a letter will arrive at a difficult or vulnerable time of year, which says, "We have increased your credit limit." Lo and behold, they get into precisely the sort of trouble that the Sunday Mirror highlighted at the weekend.

So often, there is the factor of the overblown nature of the marketing. I believe that sometimes the letters that are sent out are deliberately misleading. Their content tries to make people focus not on what should be the key issue to those who are entering into an agreement—"Can I afford to borrow this money?"—but on other issues. There is a classic example. I mentioned in Committee that I received a letter from Capital One, which was designed to persuade me to take out a card. I was sent another letter because I did not take out a card. With Capital One, the most exciting thing that anyone can do is choose the design of the credit card. It is that on which the company tries to focus people. There are four small sticky colour maps and the recipient can choose to stick one of these on the card and return it. Surely that is a deliberate attempt to try to get people to focus on the least important issue when taking out a credit card, rather than the important one. It is, again, an instance of irresponsible marketing.

Michael Fabricant: I want to ensure that the hon. Gentleman mentions contact by telephone as well. MBNA is a company that uses a firm in Bangalore to phone people to ask them to take out credit cards. How much research has been carried out in Bangalore when such a contact is made? Unfortunately, I have never been asked whether I am under 18.

Chris Bryant: Not even when that was the case?

The hon. Gentleman makes an important point. When I telephoned the Royal Bank of Scotland two weeks ago to confirm that I had received my new debit card, I was asked whether I wanted another credit card. The person on the phone knew that I already had a credit card, but I was asked whether I wanted another. It seems that some of the credit card companies have an addiction. They want to push more and more cards at us. I sometimes wonder whether people are being paid by results. In other words, people are paid more if they persuade people to take out more cards, regardless of whether it would be sensible to do so.

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