MPs criticise credit card industry

The Treasury select committee has accused the credit card industry of showing a "lack of commitment" to improving clarity and fairness for consumers in a letter to the main credit card body, the Association for Payment Clearing Services (APACS).

The select committee published a report last December demanding greater transparency in credit card charging systems, and demanded that companies give consumers clear information in "summary boxes", standardise the methods of calculating APRs (interest rates charged on credit), and offer more information on revenue raised from transaction and penalty fees.

In his letter to the chief executive of APACS, Chris Pearson, committee chairman John McFall said that while some changes had been made in certain areas, the industry's response in other areas had been "inadequate". Mr McFall said that progress on the key points raised in last year's report, in particular the provision of clear borrowing scenarios, greater transparency and the possible standardisation of interest rate charges, had been "slow", and said he hoped the industry was not seeking to create "obfuscation" around the issues.

"A lack of commitment is not constructive and a perception that the industry will only do the minimum necessary would not be acceptable to either the committee or to consumers," he said.

However, Mr Pearson denied any such lack of commitment. In a written response to Mr McFall, he said: "From where I sit, I certainly do not see a lack of commitment or any obfuscation within the industry on the issues raised by the select committee. On the contrary, the industry has responded with openness in addressing the issues raised and is on track to deliver the summary box by the end of March this year - this initiative will continue to develop throughout this year particularly as we receive feedback from consumers on what they do and don't like about the summary box and whether it meets its key objectives of clarifying charges and allowing products to be compared."