Shame on these plastic pedlars

WELL, what do you know? Under increasing pressure from MPs and facing the possibility of another probe by the Office of Fair Trading, credit card companies have, after all this time, managed to agree a formula that will allow consumers to compare charges on all the pieces of plastic in their wallets.

It is shocking that it has taken so long for the industry to come up with a way of calculating charges that gives customers the chance to see which deal looks the best.

It will, of course, be helpful to be able to compare the interest rate on one card with that on another. But this will do only one thing - make it even plainer that credit and store card operators are charging usurious rates for very little in return.

Clearly, consumers are not forced to use these cards. Nor are they compelled to take full advantage of the ever-increasing levels of credit they are offered. And canny shoppers can keep their charges to a minimum by paying off balances at the end of each month.

But there is something decidedly dodgy in a market whose charges bear such little relationship to the real cost of money. GE Consumer Finance, which runs store cards for the likes of Debenhams and Harrods, charges up to 30%. This has not changed in four years, even though the Bank of England has been hacking away at the base rate all that time, bringing it down to its current 3.5%.

GE argues that the lending bit of its store cards makes up only a fraction of the costs - less than 5% - so changes to the base rate, it claims, are peripheral. Consumer are asked to believe they are paying 25p in the pound for the privilege of being sent a monthly statement and having a few transactions logged on GE's mighty computer systems.

In any other context, GE would claim to be one of the most efficient financial services companies. If it has to charge so much, it merely reinforces the case for sensible shoppers to avoid plastic altogether.

It is also a questionable tactic for stores that rely on high-spending loyal consumers to conspire with the card operators to fleece their best customers.

The Department of Trade and Industry has been conducting a review of the Consumer Credit Act.

That must be speeded up. And the Office of Fair Trading should stop faffing around and turn the informal inquiry, spontaneously announced by chairman John Vickers during his roasting at the Select Committee, into a full-blown plastic probe.

Dolphin-friendly
THREE cheers for stockbroker Brewin Dolphin Securities. After Financial Mail's campaign to help small shareholders in collective funds use their votes at annual meetings, Brewin is launching its online voting service in time for the Diageo annual meeting next month.

The stockbroker will put voting cards on its website and will give investors about three weeks to register their votes. Brewin will vote its total shareholding in proportion to the website response and will assume that if investors do not vote 'for' or 'against' that they are making a positive abstention.

After the meeting, the results will be posted on the website. This is a major breakthrough for small shareholders, who frequently lose the ability to vote because their holdings are wrapped up in larger funds.

And too often their brokers and investment managers do nothing to help them register their views on issues such as executive pay, the reelection of directors or the accounts ahead of annual meetings. Underpinning the Brewin initiative is the electronic voting system launched earlier this year by the Crest settlement service, to which about half of all FTSE 100 companies, including Diageo, have now signed up.

Most of the big share custodians have also signalled they will begin voting electronically. Not only should this make the entire system of voting at annual meetings more secure, it should also help to eliminate some of the glitches that in the spring AGM season meantms of votes inexplicably went missing.

And at the end of this month, I understand, Crest will also start publishing details of 'stock lending', whereby shareholders lend shares --and the votes that go with them - to others.

This will be revealing stuff; not only will it be the first time that investors have the chance to see exactly what shares in a company are out 'on loan' at any stage, but over time it should show whether someone who thinks they are in the know is trying to build a position ahead of a possible takeover or controversial annual meeting.