M&S backs down over credit card

HIGH Street stores group Marks & Spencer has been forced into a retreat by the Office of Fair Trading over its plans to send out unsolicited credit cards, a move that would make the retailer Britain's seventh-largest credit card provider.

The company launched its combined credit/loyalty card, '&more', on Monday, and had planned to send it out to up to 2.6m customers automatically replacing their existing storecards.

But the OFT said today that sending unsolicited credit cards is a contravention of the Consumer Credit Act.

The watchdog also rejected M&S's argument that the mailing of the new cards was simply a result of the changes to the storecard terms.

M&S 'did not have the right to change one type of card into another this way', it maintained.

The retailer has now agreed that customers who want to keep the storecard may do so without taking any further action. If they want to take up the new card, they need to activate it, thus reducing the amount of 'inertia selling'.

OFT chairman John Vickers said: 'Inertia selling of credit can have damaging consequences for customers. In this case Marks & Spencer Financial Services has agreed to take practical steps so that consumers will move from storecard to credit card only if they positively make that choice.'

A spokeswoman for M&S said the group's roll-out plans for &more would not be affected by the changes, and that the group still expected most of the 2.6m customers to take up the new card.