Driving change from within the credit card industry
An article for Credit, Collections & Risk
By Paul McCarron, Cards & Fraud Control, The UK Cards Association
It’s been a busy and challenging time for the credit card industry, but this has presented opportunities to build on our long standing commitments to transparency and responsible lending. Last November saw the Credit Card Summit, set-up by the Department for Business, Enterprise & Regulatory Reform (BERR), which led to the industry delivering on two key commitments in short order, aimed at assisting customers who may be experiencing difficulties in the downturn.
The first of these was a ‘statement of principles’ on risk-based re-pricing, providing greater transparency and more options for customers faced with an increase in their interest rate. The second area was to work closely with the debt advice sector to develop a process allowing customers facing difficulties to benefit from a period of 30 days ‘breathing space’, suspending normal collections activity whilst they work with a not-for-profit debt advice agency to agree appropriate repayment arrangements.
More recently, the credit card industry has played a leading role in developing the work of BERR’s Consumer Finance Forum (CFF), where key areas of focus have included the creation of a data-monitoring capability, the treatment of customers in financial difficulties and an assessment of the emerging issues facing both consumers and industry as a result of the downturn.
The industry has also risen to the challenge in respect of further questions posed by Government, regarding unsolicited credit limit increases and credit card cheques and whether changes to legislation, or to existing, strong industry best practice, can deliver more control for customers in the current climate, whilst avoiding unintended consequences.
Concurrent with these challenges, 2nd April marked the birth of The UK Cards Association, and successor body to APACS’ Card Payments Group. The new body will replace the name ‘APACS’ as the banner under which all card related activities are progressed, inheriting responsibility for representing the interests of card issuers and acquirers in the UK in fields such as transparency, responsible lending, fraud prevention and new infrastructure. The creation of The UK Cards Association will bring greater clarity to our role, enabling us to communicate even more effectively with a broad range of external stakeholders.
