Industry forced to admit stealth rip-off
In response to todays Treasury Select Committee Hearing Laurence Baxter, Senior Policy Advisor, Which? said:
"There finally seems to be general acceptance among lenders that the different rules to calculate interest rates are unfair and means that their customers cannot accurately compare cards. The only solution to this grand stealth rip-off is industry-wide standardisation of the way credit-card interest is calculated. "Contrary to industry gripes that such a move would 'straight-jacket' competition, standardisation would actually result in people really being able to compare APRs and know how much they'd be paying. This in turn would encourage switching, which would lead to greater competition. "Putting interest calculation information in to a summary box is not the solution that lenders are touting it to be. Adding the complex and often unintelligible details on how interest is calculated would cause further confusion and would not help people compare cards. "Finally, on the point of data-sharing, Which? believes only full data-sharing on all credit products - not just on credit cards - will allow companies to lend responsibly."
Date published: 10/27/2004 9:20:27 AM
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