6 Conclusion
137. This inquiry arose out of concerns about unfair
treatment of consumers and fears that industry practices—in
both the credit card and store card sectors—were raising
levels of unmanageable personal debt. As we noted at the beginning
of this report, many of our concerns appear to have been fully
justified.
138. We have made a number of recommendations to
address the problem. Some of these are primarily directed at the
industry, and some at the regulatory authorities in the form of
the Department of Trade and Industry and the Office of Fair Trading.
In practice, it is both industry
and the regulators who need to act, working together. We hope
that the coming months will provide evidence of effective action
and cooperation between all those involved. We will be monitoring
developments and will if necessary return to the subject with
further hearings if we are not satisfied.
139. This is not to say that nothing has been done
already by the industry, supported by the regulators, and—in
recent months—prompted by this Committee, to improve the
situation. In particular, agreement has been reached on the principle
of the introduction of a Summary Box providing key information,
and further improvements—for example in the establishment
of a single way of calculating the APR—should result from
the consumer credit White Paper published at the beginning of
December. In addition, the OFT is examining the state of competition
in the store card sector of the industry. But we have gained the
strong impression that it has largely been pressure from this
Committee which has brought about these developments.
140. The deliberate
obscurity of information vital to comparing credit cards and to
competition in the industry has been a most disturbing aspect
of the Committee's inquiry. It is also a matter of concern that
the statutory regulator, the Office of Fair Trading, did not appear
to be aware of the unsatisfactory state of affairs in the industry
or if aware did nothing to remedy the situation until it was publicly
revealed by the Committee. The Department of Trade and Industry
was aware of the situation but showed little sense of urgency
to remedy the position. Instead it appeared to believe that the
leisurely publication of consultation papers and the use of the
European Commission as an alibi for inaction justified its pedestrian
approach.
141. The passivity
of the statutory regulator, the Office of Fair Trading, in the
face of blatant unfairness to consumers is unacceptable. We call
for a far more active approach in future and deliberate attempts
to broker a voluntary agreement where statutory powers are considered
inadequate. We will be looking for evidence of this in the coming
months. We are pleased to see that the DTI are now treating the
matter as urgent and intend to bring forward a new Consumer Credit
Act which we hope will deal with the issues raised in this report.
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