We respond to FCA’s update on remedies for persistent credit card debt
14 December, 2017
Today the FCA have released an update paper on credit cards and persistent credit card debt, announcing a new six week consultation period on the proposals which ends on the 25th January. This follows their proposed remedies consultation to help millions of people get out of expensive longer-term credit card debt from April 2017.
We have previously called on the FCA to take action on minimum payments and unsolicited credit limit increases to reduce the harm caused by persistent credit card debt and prevent people getting into it in the first place. This update constitutes progress but there is further work to be done.
In response, Peter Tutton, Head of Policy at StepChange Debt Charity said:
“With 3.3 million people in the UK in persistent credit card debt and a further 2 million stuck in overdraft debt according to our latest findings, we welcome the FCA’s focus on helping people out of persistent problem debt. However, FCA action should deliver a dramatic reduction in the number of people trapped in persistent credit card debt now and prevent more people getting trapped in the same way in future.
“The FCA must ensure that all credit card lenders treat people consistently and fairly to offer a safe and affordable way out of persistent credit card debt.
“The FCA must now quickly act to ensure minimum repayments in credit card agreements are sufficient to prevent new borrowers falling into the same long term debt trap.”