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UK government to tackle high consumer debt

UK government to tackle high consumer debt

Britain's business chief will tackle the problem of high consumer debt Wednesday by urging the credit card industry to stop practices that risk hurting households' finances at a time of economic uncertainty.
These practices include interest rate hikes of as much as 10 percent overnight and rising average interest rates despite a big cut in the Bank of England's base rate earlier this month.
Peter Mandelson, Britain's business secretary, and Gareth Thomas, the country's head of consumer affairs, have summoned credit card bosses to a meeting at the Department for Business to tell the lenders they are not happy with such behavior.
"Many people feel stitched up by credit card lenders and there are definitely pockets of bad behavior," Mandelson said in an interview with the GMTV breakfast show ahead of the summit. "I want them to accept voluntarily a code of good behavior."
If credit card companies do not agree to make changes _ such as allowing some borrowers to delay making payments without incurring added fees _ the government said it would not shy away from asking the independent Office of Fair Trading to investigate them.
That office can "demand information from the industry, fine companies and take away licenses," Thomas told the Associated Press.
But Thomas said he believed the credit card companies would agree with the government on a code of practice. "I think we will make progress," he said.
The industry group that represents Britain's credit card companies, APACS, said the industry was indeed happy to discuss its practices with the government during these "exceptional times."
"We welcome the opportunity to explore how we can best support the government to keep the economy moving, help our customers borrow responsibly and, of course, help those individuals who find themselves in financial difficulty," the group said in a statement.
Britons have more credit card debt on average than any other Europeans, according to market researcher Datamonitor.


Updated : 2021-10-20 22:44 GMT+08:00