Downing Street Says » Consumer finance podcast

A transcript of a podcast recorded by the Prime Minister about consumer finance.

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You know, one of the challenges we are confronting in the wake of the financial crisis is the behaviour of some banks and credit card companies towards you – their customers.

I know, for example, that the way some treat you – whether it’s unreasonable overdraft charges, interest rate hikes on loans, or simply bad customer service – puts extra pressure on you and your household budgets just at a time when finances are tight for many.

That, of course, is not fair. And it appals me to think that some see an opportunity to exploit families in difficulty to make a few extra pounds profit.

So I’d like to talk to you this week about the action we are taking to change that culture.

On Monday – to coincide with World Consumer Rights Day – we’ll be announcing a number of measures as the next stage in our reinvention of financial services after the global banking crisis.

We want not only to empower and protect you, as consumers, but also to make banks and credit card companies behave responsibly and act fairly.

And so we will re-write the rules on lending to end the sharp practices which sting so many credit card holders.

For example, by changing how your repayments are allocated to your credit card debt we will help put hundreds of millions of pounds a year back into your pockets and purses.

That’s money you could use for a family outing, a treat for the kids, or a meal in town.

We will also give you a statutory right to reject interest rate increases, so that you can keep paying off your old debt at the old rate.

And because we’re on your side, we will ban companies from hiking up the interest rates they charge you – or increasing your credit limit without being asked – if you are struggling to make ends meet.

And never again should banks and credit card companies encourage you to borrow more than you can realistically repay.

There will also be new regulations and guidelines to stop irresponsible and unaffordable lending and there’ll also be new cooling off periods for consumers offered new credit.

Lenders that don’t comply will face tough sanctions, like having their licences revoked.

Now I know that the most important financial summits are those that take place around the kitchen table – and to support you as you manage the family budget we’re also setting up a national Money Guidance Service’ paid for by the banks.

This will help one million of you to choose financial products and to deal with debt. And also – from next month – the Citizens’ Advice Service will receive a further 5 million to pay for longer opening hours.

This kind of action is what we mean when we talk about building a more responsible and a fairer Britain.

In fact, everything we do is driven by my determination to ensure a fair deal for all; for financial services that work for you, not for them.

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» Friday, February 14, 0110

Consumer finance podcast

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