Store card probe 'a waste of time'

THE Competition Commission's inquiry into store cards is expected to last 18 months, cost millions and be a waste of time, say critics.

Regulators are investigating whether cards offered by retailers such as House of Fraser and Marks & Spencer charge excessively high interest rates.

They are also assessing whether there is enough competition among finance firms that provide card services such as GE Capital and HSBC.

Many economists say the probe should never have been launched and the regulators' meddling will come to nothing.

Though store card charges are steep, critics argue that other credit cards and loans are available. And they say some people use store cards because they cannot get access to other credit.

Many believe the Competition Commission will merely reinforce the need for transparency about rates.

The regulator issued a statement on the issues it will be considering. Investec analyst Matthew McEachran said there was 'no hint of regulatory interference' in the statement, which was 'even less conclusive than might have been expected'.

The Commission promised to consider the wider credit market and not just store cards. The industry wants a 'level playing field'.

Around 35% of HoF's sales are thought to take place on store cards, with interest charges potentially generating £20m profit a year. About 15% of M&S sales are on its card.