Card companies clash with MPs

A COMMONS committee has criticised credit card companies for failing to respond 'adequately' to concerns over the transparency of charges.

It follows the publication in December of last year, of a report by the Treasury Committee into the transparency of credit card charges.

The report made a number of recommendations designed to benefit lenders, including the introduction of summary boxes on credit card statements featuring clear information on rates for card users.

It also called for standardisation of the way interest charges are calculated. Currently there are two ways of calculating annual percentage rates and 10 ways of working out other charges.

But in a letter sent today to Apacs, the trade body for UK banks and building societies, the committee today criticised the lack of progress made by lenders in a number of key areas.

John McFall, MP, chairman of the Treasury Committee said: 'The committee recognises there has been progress on some issues but in other areas we are concerned that the industry‘s response has so far been inadequate.

'I hope there is no question of some in the industry seeking to create obfuscation around these issues, rather than to seek genuine solutions which will benefit consumers and the image of the industry,' he added.

'A lack of commitment is not constructive and a perception that the industry will only do the minimum necessary would not be acceptable to either the committee or consumers.'

Apacs reacted strongly to McFall's complaints. In his reply to the letter, Chris Pearson, chief executive of Apacs, says: 'From where I sit I certainly do not see a lack of commitment or any obfuscation within the industry on the issues raised by the Select Committee.

'On the contrary, the industry has responded with openness in addressing the issues raised and is on track to deliver the Summary box by the end of March this year.'

The Treasury Committee and Apacs are to meet monthly, in a bid to monitor progress made by lenders in ensuring greater transparency and simplicity for credit card users.