A government white paper revealed today by Lord Mandelson, the business secretary, has made waves in the debt management industry, after attacking credit card companies.
The paper, snappily titled 'A better future for consumers - delivering real help now and change for the future' has set out to ensure that lenders are more responsible in their role. Some of the points highlighted by the paper are:
The use of credit card cheques. These cheques are usually subject to a higher interest rate than normal, and often include 2% handling charges. They are often sent out by lenders, particularly to potential debt management clients. Under the white paper, these would not be banned completely, but would only be able to be sent out on request by the consumer.
Raising credit limits. Lenders have been attacked by consumer action groups for a while now, over their tendancy to increase consumers credit limits without notice, encouraging irresponsible borrowing, and leading consumers into potential debt management problems. The paper also looks to address instances where lenders have increased interest rates on existing debts.
The paper will also look at introducing a consumer advocate, and a review by the OFT into highcost credit such as payday loans.
If any of the points in the white paper affect you, call MRA Debt Help on 01424 777156 to speak to one of our debt counsellors
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