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Consumer Credit Act Shake-up - December 08, 2003
High Street Banks and credit card providers will finally have their regulations updated. They now face possible fines for giving misleading and unfair information when advertising for credit cards and these rules also apply to unfair loan penalties. A slightly disappointing aspect of the shake-up is that the full effect will not begin till 2005. The move by the government will allow UK borrowers to escape the traps of unfair deals, such as store cards that have hidden charges and loans that penalize you for paying them off early. The long awaited overhaul of the 1974 Consumer Credit Act first proposed in July 01, will final take effect in stages. For example some rules come into effect next year such as the tightening of advertising guidelines. Some Ministers believe some lenders are bending and exploiting the rules too far, the current rules were written almost 30 years ago when there were fewer borrowers than today. The old credit market was very small, and times have changed things are more complicated than 30 years ago. Ministers are strongly criticising the outrageous fees that some credit card leaders are currently charging. Government officials have criticised the recent Barclaycard advertising campaign that promised 0% APR forever as a need for a tighter rain on lenders. Barclaycard were finally persuaded to stop their 0% interest advert buy the OFT last month claiming it was misleading. Evidence revealed in a recent review on Dr No Thanks suggests that Barclaycard have already had a reasonable take up.
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