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Our response to FCA credit card remedies consultation

4 April 2017

In response to the Financial Conduct Authority’s credit card market study: consultation on persistent debt and earlier intervention remedies, our Chief Executive Mike O'Connor said:

“The FCA needs to ensure that consumers are properly protected and our concern is that these proposals don’t go far enough. Credit card debts remain the biggest single category of problem debt for our clients, with average debts of over £8,000.

“We welcome moves to tackle persistent debt, but we are concerned that these proposals will not fix the central issue that credit cards, which are supposed to be a short-term form of borrowing, often become long-term and expensive debt.

“The proposals do not address the fundamental question of how credit cards trap people in persistent debt. These measures will still potentially leave people paying back substantial amounts over extended periods of time.

“Our clients tell us that unsolicited credit card limit increases are linked to deepening debt problems. The Bank of England is looking at lending standards and the FCA should have sent a clear message to firms that credit should be bought and not sold by banning all unsolicited credit limit increases. New protections have only been introduced for new credit cards when they should exist for all accounts.

“Two key questions remain. How will these proposals help prevent people from falling into persistent debt? And will these interventions do enough to get people out of long-term debt?”

StepChange Debt Charity news contact

Contact the StepChange news team on:

Tel: 0207 391 4598

Mobile: 07985 404 153

Email: press@stepchange.org

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Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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© StepChange Debt Charity 2017