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Last Updated: Wednesday, 10 September, 2003, 07:51 GMT 08:51 UK
Watchdog to launch store card inquiry
Credit cards
MPs are investigating credit card charges

The Office of Fair Trading is launching an inquiry into the store card market, following criticism from MPs.

John Vickers, chairman of the UK's trading watchdog, said there were "unsatisfactory practices".

He intends to look at regulation of the market and whether there was sufficient competition.

The market position of GE Capital is expected to come under the spotlight of the inquiry, as it is one of the biggest firms in the market and is behind store cards at House of Fraser and Arcadia - and has 10 million customers.

Grilling

At an earlier hearing of the Treasury Select Committee before the summer recess, store cards came under a barrage of criticism from MPs.

The credit card companies behind expensive store cards were accused of being "designer loan-sharks".

In angry exchanges, the Treasury select committee also said the companies were "fleecing customers" with high interest rates.

Given that Bank of England base rates are at 3.5%, MPs said, this was "usury", when store card rates were as high as 32%.

Next month a "Who's Who" of British banking will be questioned by the committee's probe into credit and store cards.

The heads of the four largest banks in the UK, including Matthew Barrett of Barclays and James Crosby of HBOS, will appear before the committee.


SEE ALSO:
Store cards 'fleecing customers'
14 Jul 03  |  Business
Credit crackdown announced
22 Jul 03  |  Business
Credit card charges attacked by MPs
09 Jul 03  |  Business
Credit probe to examine store cards
08 Jul 03  |  Business


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