David Cameron’s new coalition government plans strict new legislation for the credit card industry on unfair charges. Of course UK consumers have heard this before of course, but there is a new development in the story.
The most stringent regulations for credit card issuers and stores were in the electoral manifesto of all major parties, and they were discussed by the previous government. However, the financial meltdown and the nationalization of many banks mean that credit card companies are now facing direct competition from government-controlled banks as well as legislative pressure to give consumers a much better deal.
Accessing independent websites that allow consumers to easily compare credit cards over the Internet also creates a more open market, which puts more pressure on unfair fees.
Mark Gander of the Consumer Action Group, a violent activist on bank fees, gave a great deal of admiration to the government’s plans, but said the ads so far have been few in detail.
“It [the government] does not define” unfair “or say what protection will generally be granted,” Mark said.
In a shrewd move, MBNA Bank in the UK released graffiti and acted before legislation to change the way customers pay their accounts.
MBNA with over 6 million British customers has announced that as of September 1, 2010 it will allocate incoming payments from clients in order to pay the highest interest fees on their accounts first. Customers must be notified of changes officially on any day.
In March this year, the card industry announced a series of gentle steps to improve payment and customer rights in an effort to stave off stricter regulation when the government finally came close to looking closely at industry fees.
It is rumored that the planned changes in the industry are likely to cost £ 533 million over the first two years, doubling the cost of the proposals package presented by the industry in January 2010. The proposals were based on an analysis of 44 million customer accounts covering the cardholder’s behavior over the past two years.
The author Peter Robinson is a personal finance writer who specializes in credit cards. Peter runs a newsletter and separate credit card information website called Cardchoices where you can compare credit cards [http://www.cardchoices.co.uk/compare-credit-cards/] and apply online for instant approval.
