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"PM sends warning to credit card providers"

By admin | December 10th, 2008 | Featured

The Prime Minister, Gordon Brown, has sent a message out to the UK’s credit card giants, warning them to stop fleecing consumers with sky high interest rates. The financial news has been filled with stories about how credit card companies are still charging extortionate rates on interest on borrowing even though the base rate has plummeted over the past couple of months, and the Prime Minister now wants something done, as he is appalled that credit card firms are getting away with ripping consumers off in the current difficult financial climate.

Mr Brown wants credit card firms to act more responsibly in order to help consumers to get through these financially difficult times, and the angry PM said that this did not involve imposing rip of interest rates and charges. Ministers have met up recently with a view to bringing in a new code of practice to help protect consumers.

Lord Mandelson said: ‘We have initiated a dialogue with the credit card companies to bring forward a code of best practice to ensure that everything possible is done to help families get through tough times ahead.’

The Prime Minister said that it was unfair of credit card companies to make life even more financially difficult for consumers, given the difficulties that most were already facing in the current financial climate. He said that the government wanted to establish rules and regulations to make lenders act more fairly towards struggling consumers. Mr Brown is said to be angry that some credit cards have raised their interest rates by 10% and that one store card was charging an astonishing 200% in interest.

The Prime Minister said: ‘I think we have got to bring the credit card industry in to talk to them to join with us in establishing clear principles to apply to the costs people face on their existing debts. This new responsible approach to lending that I think that the credit card industry wants to support will help households through the difficult period that they have.’

A spokesman for the Prime Minister added: ‘He is very concerned about some of the reports that he has received about the behaviour of some credit card companies. Some companies are behaving responsibly but there are clearly examples of other credit card companies which have taken action which on the face of it appears to be difficult to justify.’

APACS, the agency that represents credit card firms, said that it was happy to enter into talks with the government in relation to this issue, and a spokesperson from the agency said: ‘The industry continues to be committed to the principles of responsible lending, and to ensuring that any customer who finds themselves in financial difficulty is treated sympathetically and fairly.’

Tags: Credit Cards, gordon brown

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