OFFICE OF FAIR
TRADING News Release (19/08) issued by The Government News Network
on 11 February 2008
The OFT has
published its report into credit card comparisons, which makes a
series of recommendations to help consumers choose a credit card.
Download a copy of the report from the OFT website : http://www.oft.gov.uk.
The report follows a super-complaint from Which? that highlighted
that consumers choose credit cards without understanding all the
issues that affect the cost of the card. OFT research shows that
70 percent of credit card holders did not shop around before
selecting their current card, and that this meant they could be
placing themselves at a financial disadvantage.
Research into the report involved looking at issues surrounding
the comparative costs of using different credit cards for
purchases, cash advances, introductory offers and payment
allocation. The research followed work with the credit card
industry, consumer groups, other regulators, government bodies and
other key stakeholders. The main recommendations are :
* the introduction of an independent credit card price comparison
website run by the FSA,
* improvement to how information is presented in credit card
issuers' summary boxes,
* standardisation of terminology used by credit card issuers in
their product literature, and
* improvements to consumer education about the benefits of
shopping around for a credit card.
The OFT will work with the card industry to implement the
improvements to summary boxes, standardisation of terminology and
education campaign.
John Fingleton, OFT Chief Executive said:
'No-one wants to throw money away, but consumers who
don't shop around for credit cards are doing just that. It is
essential that consumers are given the right tools to make
comparisons between credit cards more easily, and we can achieve
this through some of the recommendations announced today which
have received widespread support from the FSA, APACS and the rest
of the financial sector.'
The OFT will work with all the relevant parties to implement
these recommendations.
NOTES
1. The right to submit super-complaints was created by section 11
of the Enterprise Act 2002. A super-complaint is defined under
section 11(1) of the Act as a complaint submitted by a designated
consumer body that 'any feature or combination of features,
of a market in the United Kingdom for goods or services is or
appears to be significantly harming the interests of consumers.'
2. On 1 April 2007 Which? submitted a super-complaint to the OFT
about credit card interest calculation methods. See Which? website
for details.
http://www.oft.gov.uk
PUBLIC enquiries: 0845 7224499 enquiries@oft.gov.uk
OFT
reports and consumer information leaflets are available free
from:
OFT, PO Box 366, Hayes UB3 1XB 0870 6060321 oft@eclogistics.co.uk