APACS: Summary bix for credit card cheques

Friday, 01, Sep 2006 12:00

CREDIT CARD INDUSTRY LAUNCHES NEW SUMMARY BOX FOR CREDIT CARD CHEQUES

-MP welcomes new Summary Box for credit card cheques providing consumers with key information in a consistent and concise format

-Launch of new Summary Box coincides with publication of APACS Best Practice Guidelines 2006 setting out detail of this, and other transparency and responsible lending initiatives

APACS, the UK payments association, today (31 August 2006) launched the new credit card cheque Summary Box. This coincides with the launch of APACS Best Practice Guidelines 2006 - a report which brings together all the credit card industry guidelines developed to improve the transparency of products and make lending more responsible for the benefit of credit card customers. The new Summary Box will accompany all credit card cheques sent out in the UK by the end of the year.

This move extends the Summary Box concept - which currently appears on credit card marketing material and on monthly statements - to cover credit card cheques. The Summary Box provides a common standard adhered to by all credit card issuers, giving customers simple, at-a-glance information about key product features like the Annual Percentage Rate (APR), interest rates, the length of the interest-free period, the minimum repayment and all charges that might be incurred.

Credit card cheques allow customers to draw funds against an existing credit card account. They provide an alternative way to pay, in circumstances where credit cards are not accepted. For example to pay an emergency supplier that doesn't have card-accepting facilities, like a plumber. Specifically they are often used to transfer balances between cards at low promotional rates.

Mark Lazarowicz MP, Chair of the All-Party Parliamentary Group on Debt and Personal Finance, says:

'The introduction of the Summary Box two years ago was a step in the right direction for credit cards. Since then we have seen further moves - both from the industry and regulators - to make them easier to understand for customers. I welcome that.

Whilst I am yet to be convinced that credit card cheques are something the consumer really needs, this extension of the summary box concept to credit card cheques shows that the industry has listened to the concerns that have been raised. If the guidelines are implemented properly, they should offer increased protection for consumers.'

Sandra Quinn, director of communications at APACS, says:

'The launch of the credit card cheque Summary Box is another step forward - helping customers to easily understand and compare costs of credit card cheques at-a-glance. This move is another positive change taken by the credit card industry and is part of their ongoing aim to achieve the highest level of transparency in our products and responsible lending practices.

As with all industry improvements our next step will be to propose the new credit card cheque Summary Box for inclusion in the 2008 version of the Banking Code. We believe that the Banking Code gives UK consumers an unparalleled level of protection, reducing the need for regulation.

Independent enforcement and monitoring ensures that banks and building societies meet the best practice guidelines that are enshrined within the Code. Today's launch of the new credit card cheque Summary Box and other best practice guidelines shows an industry committed to positive change.'

Available from http://www.apacs.org.uk/resources_publications/best_practice.html the guidelines provide our members with a set of guidelines to adhere to on plastic card-related issues including:

·Credit card Summary Box

·Cardholder statement version of the Summary Box

·Credit card cheques guidelines and version of the Summary Box

·Credit card limit increases

·Minimum repayment health warning

·Debt advice health warning

·Direct sales of credit cards

·Data sharing

·Internet guidelines for merchant acquirers

·Interchange waiver on charitable donations

·Recurring transactions

- ENDS -

For further information contact the APACS Cards Information Office:

T: 0870 420 3208 E: apacs@fourcommunications.com

·APACS is the UK payments association. It provides the forum for the UK's financial institutions to come together on non-competitive issues, to develop banking systems for the future and to provide innovation and developments in payments. It is also the banking industry voice on payments issues such as plastic cards, payment fraud, cheques, electronic payments and cash and is the banking organisation coordinating chip and PIN roll-out.

·Credit card cheques do not grant new lines of credit and can only be written within the credit limit. Customers can opt out of receiving credit card cheques by simply contacting their card company. Any customer sent a credit card cheque will receive information advising them how they work and what charges are involved. These commitments are enshrined in the current Banking Code.

·The credit card cheque Summary Box covers the following key product features:

oInterest rates

oInterest period

oAllocation of payment

oCharges

oStopping a cheque

oOpt-out

oLevel of protection

oRestrictions on use