FCA unveils steps to tackle credit-card debt problems

The City watchdog has unveiled a raft of new measures to deal with concerns over “persistent and potentially problematic” debt racked up by credit-card users.

Publishing its final findings from a study into the market, the Financial Conduct Authority said: “Firms do not have strong incentives to help customers out of persistent credit-card debt”.

About two million people in the UK have credit-card accounts that are in arrears or default. Two million more carry persistent debt on their cards and 1.6 million repeatedly make just the minimum payment.

“Competition is working fairly well for most consumers, with firms competing strongly for custom. However, we remain concerned about persistent and potentially problematic credit-card debt,” FCA director of strategy and competition Christopher Woolard said.

The regulator put forward proposals to encourage the industry to contact consumers before they get into difficulty. It wants companies to provide timely information on how much customers are borrowing and on possible over-limit charges and let them choose the payment dates.

Other measures will be taken through FCA rules, industry agreements or supervisory work.