Credit Card Charges

Speech by Norman Lamb MP, Liberal Democrat Treasury Spokesperson delivered to Treasury Select Committee on Thu 22nd Apr 2004

Mr Lamb said, "We have specific concerns about how the market operates. As other hon. Members have said, competition does not work effectively unless there is clear information and consumer knowledge and understanding of the product. That has certainly not been the case so far."

"It is right to criticise the industry for its record on transparency. The charge against it is that it has been opaque and misleading, and the verdict is that it is clearly guilty. It is perhaps fair to say that not all members of the industry are guilty, but the problem is that the worst within it taint the whole industry and give it a bad reputation. It has taken the Treasury Committee inquiry to shake it into action and to make industry representatives accept that."

"On sales and marketing and the related issue of responsible lending, it was remarkably cavalier and self-defeating of Barclays, during the course of our inquiry, to promote a card that offered 0 per cent. for ever… That is the sort of thing that brings the whole industry into disrepute."

"On the question of consumer knowledge and financial literacy, Mr. Ron Sandler has recently been quoted as saying that the vast majority of consumers are confused and daunted when dealing with the financial services industry. There has been a pilot scheme in 300 secondary schools to ensure that children get education about financial services so that they can make informed choices. The Association of Investment Trust Companies has put forward a proposal that there should be a levy placed on regulated financial services firms to contribute to ensure that such education takes place. That is an initiative that should be pursued further."

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