NEW sets of rules expected to tackle the UK’s consumer debt mountain will be placed on credit card companies later this year.
Prime Minister Gordon Brown will announce today new regulations that are expected to save consumers roughly £296m and allow for greater power over their finances.
Brown said: “Step by step we are reinventing the financial services industry. These new rights will put an end to the irresponsible lending practices that people have been most concerned about and help cut the cost of borrowing.”
The changes will mean the most expensive debt is paid off quicker, better repayment plans for new customers will be put into place, a ban on credit limit and rate increases will be put into place for people in financial difficulty.
There will be a 60 day right to reject interest rate increases.
The new rules, which will force lenders to first check whether or not customers can afford a loan, will be introduced before the summer and given statutory power.
Shadow Financial Secretary Mark Hoban said the new restrictions do not go far enough.
“Labour have failed to the take tough action necessary to stand up for British consumers and end financial rip-offs,” he said.
“Today, they have flunked that test yet again.”