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developments in the uk credit card consultation November 12, 2009

Posted by Bradley in : consultation , trackback

In an unusual move, the UK Department of Business, Information and Skills has published a press release relating to the credit card consultation which states:

PricewaterhouseCoopers released a report today on the future of the credit card market.
Commenting on the report, a Department for Business spokesperson said:
“Two weeks ago the Government launched a consultation on new measures which we believe will give consumers who use credit cards a better deal. That consultation is receiving an extraordinarily positive response from the public.
“Consumers are clearly very concerned about the credit card market and we are determined to put the customer back in the driving seat.
“There is a need to proceed carefully but the PricewaterhouseCoopers report fails to reflect the many positive options credit card companies have to reform the current system.
“Consumers would not be impressed if credit card companies used this report to argue against change; they should not hide behind this report.”

The report in question is the latest Precious Plastic Report (the BIS doesn’t make it easy to find – not even citing the report by its title), so it’s not exactly directed at the current consultation, although it is clearly written in a context where the regulation of credit cards is an issue. The report does suggest that regulation (in the US as well as the UK) may have negative impacts on the credit card market. But I think that credit card companies have taken advantage of their customers and of their customers’ vulnerabilities on both sides of the Atlantic in ways that are unethical and some of which ought to be illegal. And if I were writing the latest in a series of reports on the credit card market I’d feel obliged to notice that the political calculus with respect to financial regulation generally and with respect to consumer issues particularly has changed recently. So, isn’t the BIS over-reacting? And will the over-reaction be counter-productive?

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