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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.

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