October 26, 2004:
Great Britain/U.K./United Kingdom -
CREDIT card bosses have faced fresh calls from MPs to implement measures to control consumer debt. Leading banks faced a grilling from the Treasury Select Committee today over the policy of unsolicited cheques sent out to customers.
Credit card bosses were told that their methods of calculating card charges were confusing consumers.
It was the turn of Barclays, RBS, HSBC and MBNA’s executives to face the committee this week following Lloyds TSB, HBOS and Capital One last week.
James Plaskitt, Labour MP for Warwick and Leamington, accused credit card firms of ‘pumping’ the cheques at customers.
Plaskitt said: ‘You hope that the credit card cheque will arrive on the door mat at the same time as the glossy brochure for a holiday.’
The card companies defended themselves by claiming the cheques were simply another method for customers to obtain their credit.
None of the firms were enthusiastic when asked about the idea of customers ‘opting in’ to receiving cheques.
They were equally unwilling to discuss details about money they received in default charges - penalties customers incur for late payments.
Chair of the committee John McFall said: ‘People think you have something to hide here.
‘Is it genuine or are you fleecing customers? It is a public relations disaster if you don’t move on this.’
Some card companies charge customers up to £25 if they miss a monthly payment.
HSBC chief executive Michael Geoghegan claimed only 0.2% of the company‘s personal banking profits came from default charges, describing the revenue stream as ‘minuscule’.
Related posts:
