Household HSBC Watch

Last Modified: 14 Sep 2005 , Source: ITN

Customers are being overcharged by up to £1 million a year for credit through store cards and associated insurance. According to the Competition Commission, interest rates are also between ten and twenty per cent higher than necessary. As a result, cardholders have paid in the region of £80 to £100 million a year in term of excess prices. CC Deputy Chairman Christopher Clarke, who is chairing the inquiry, said: “We have provisionally concluded that there are features of the store card market that effectively insulate retailers and consumer credit providers from competitive pressures, notably from credit cards and store branded credit cards.

The CC identified some 70 retailers operating store card services.

They were mostly department stores and clothing retailers, provided by six main store card issuers: Arg Card Services, Creation Financial Services, General Electric Consumer Finance UK (GECF), HSBC Group, Ikano Financial Services and Style Financial Services. At the end of 2004, there were almost 14 million active store card accounts, with outstanding balances of about £2,500 million.