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| Version 1 | Version 2 |
|---|---|
| Credit card terms 'to be curbed' | Credit card terms 'to be curbed' |
| (20 minutes later) | |
| Some unfair credit card terms are to be outlawed under proposals being put forward by the government. | Some unfair credit card terms are to be outlawed under proposals being put forward by the government. |
| It wants to stop card firms raising interest rates on existing debts and to prevent them raising someone's spending limit without authority. | It wants to stop card firms raising interest rates on existing debts and to prevent them raising someone's spending limit without authority. |
| Monthly repayments must be used to pay off the most expensive debts first, and the size of minimum repayments will be raised to ensure faster debt repayment. | Monthly repayments must be used to pay off the most expensive debts first, and the size of minimum repayments will be raised to ensure faster debt repayment. |
| The body representing UK card issuers said it would study the proposals. | The body representing UK card issuers said it would study the proposals. |
| "Today signifies the start of the government's consultation exercise," said a spokeswoman for The UK Cards Association. | "Today signifies the start of the government's consultation exercise," said a spokeswoman for The UK Cards Association. |
| "We look forward to widely publishing our own response to the many ideas put forward. | "We look forward to widely publishing our own response to the many ideas put forward. |
| "We will continue to support change where there is evidence to show that it is in the best interests of consumers. We expect the government to do the same." | "We will continue to support change where there is evidence to show that it is in the best interests of consumers. We expect the government to do the same." |
| 'Exploited' | 'Exploited' |
| The government said that credit and store companies had to "clean up their act." | The government said that credit and store companies had to "clean up their act." |
| Consumer Minister Kevin Brennan said: "My view is clear, the current relationship between card companies and consumers cannot go unchallenged. It is simply not fair. | Consumer Minister Kevin Brennan said: "My view is clear, the current relationship between card companies and consumers cannot go unchallenged. It is simply not fair. |
| "It is not acceptable for card companies to impose complex and confusing terms and conditions that can leave people baffled, or to increase interest rates without proper explanation. | "It is not acceptable for card companies to impose complex and confusing terms and conditions that can leave people baffled, or to increase interest rates without proper explanation. |
| "Consumers should not feel each month as if they have been exploited or disadvantaged," he added. | "Consumers should not feel each month as if they have been exploited or disadvantaged," he added. |
| The latest proposals, which are now being put out to consultation, by the Department for Business Innovation and Skills (BIS) include: | |
| • changing the order of priority for credit card repayments, so that the most expensive debts, such as cash advances, are paid off first | • changing the order of priority for credit card repayments, so that the most expensive debts, such as cash advances, are paid off first |
| • increasing the minimum amount that must be paid off each month to accelerate the overall rate of repayment | |
| • banning the practice of raising borrowers' credit limits without their prior consent | |
| • restricting or banning increases in interest rates on debts already incurred. | • restricting or banning increases in interest rates on debts already incurred. |
| The Nationwide building society welcomed the BIS proposals. | The Nationwide building society welcomed the BIS proposals. |
| "We are delighted that BIS have included order of payments in the review," said Nationwide director Chris Rhodes. | |
| "The US has already recognised that the practice of paying the cheapest debt first is unfair to customers and is forcing lenders to be more consumer friendly." | "The US has already recognised that the practice of paying the cheapest debt first is unfair to customers and is forcing lenders to be more consumer friendly." |
| 'Fair principles' | 'Fair principles' |
| The government's latest plans follow other limits on credit card practices brought in earlier this year. | The government's latest plans follow other limits on credit card practices brought in earlier this year. |
| These ideas came after a government-organised "credit card summit" in November last year, at which card companies agreed to a set of "fair principles". | |
| Among other things, they agreed to stop raising interest rates when a customer fell behind with their repayments. | Among other things, they agreed to stop raising interest rates when a customer fell behind with their repayments. |
| The government also pledged to ban the issuance of unsolicited credit card cheques and legislation to do this is now going through Parliament. | The government also pledged to ban the issuance of unsolicited credit card cheques and legislation to do this is now going through Parliament. |