FCA To Save Credit Card Customers Up To £1.3bn

15th December 2017.

Britain’s indebted credit card customers could save up to £1.3bn a year under new rules designed to help people who fall into persistent debt.

The Financial Conduct Authority (FCA) recently published plans to reduce or cancel interest charges for people struggling to repay.

Customers will also be prompted to make faster repayments or be sent recommended repayment plans, the FCA said.

The financial watchdog has further agreed on a voluntary scheme with lenders under which customers will no longer be offered increases on their credit limits. This is estimated to help 1.4m people a year.

However, the FCA has received criticism and been accused of not going far enough with its plans to stop people going into debt.

Gillian Guy, chief executive of the Citizens Advice Bureau, slammed the regulator for not just banning unsolicited extra credit outright, rather than the voluntary scheme is has established.

“There isn’t a single good reason to allow unsolicited increases to continue. If we are to stop people getting trapped into debt spirals, the FCA should use the extended consultation period to reconsider and end this damaging practice”, he added.

The FCA has estimated that around 3.3m Britons are mired in persistent debt.

Andrew Bailey, chief executive of the FCA, insists that the proposals will save consumers billions of pounds while exposing those who are falling into financial hardship.

The proposals were drawn up after the FCA conducted a study of 34 million credit card accounts and surveyed nearly 40,000 consumers.

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