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Competition Commission publishes final report on Store Cards | |||||
| The following is an adaptation of an article appearing in http://www.law-now.com on 13th March 2006. On Wednesday the Competition Commission (CC) published its final report on store cards and the sale of related PPI. The Commission confirmed its provisional conclusions reached in September 2005 that there is an adverse effect on competition in connection with the supply of consumer credit through store cards and associated insurance in the UK. The CC found that there is a combination of features which prevent, restrict or distort competition in that market and has suggested remedies to tackle these concerns. The concerns over PPI highlighted in the report overlap with those identified in the FSA´s thematic work on PPI published in November 2005. The findings and outcomes from both the CC inquiry and the FSA work will play a key role in influencing the direction of the Office of Fair Trading (OFT) work on the Citizens Advice (CitA) super-complaint about payment protection insurance, the scope of which will be announced soon. Store card credit - The Commission has decided on the following actions: " full information on statements, including: - the current annual percentage rate (APR) applicable to purchases; - an estimate of interest payable next month in the event that the cardholder only makes a minimum payment; " APR warning on store card statements where the APR is 25 per cent or more; " provision and prominent display of facility to pay outstanding balances by direct debit. These remedies aim to combat the following concerns: " most store cardholders who take credit pay higher prices for that credit than would be expected in a competitive market; and " a lack of transparency in the provision of store card credit leads to cardholders taking credit on terms which are not clear to them. The OFT intends to carry out a market study into PPI, the precise scope of which will be announced soon, now that the CC has published its final report. One of the motivations for the CC report was to determine whether a broader Commission investigation is required into PPI beyond the store card sector. In light of the findings it seems very likely that the OFT will make a further reference to the Commission to investigate the sector as a whole as part of its market study into PPI. For this and other news items please visit www.debtscotland.com . By registering on the site you will find a host of debt recovery and credit control tools in the free credit resources section. Stephen Cowan Yuill & Kyle, debt recovery & credit control lawyers, Scotland 79 West Regent Street, Glasgow G2 2AR scowan@yuill-kyle.co.uk Direct Dial: 0141-572-4251 www.debtscotland.com www.ykcreditcheck.co.uk | |||||
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