McFall presses card providers

John McFall, the sharp-tongued chairman of the Treasury Select Committee, sent out a strong message to credit and store card providers yesterday, warning them to bring forward proposals to make charges clearer.

Mr McFall, Labour MP for Dumbarton, has written to card issuers asking for plans for a "Schumer Box", which would enable consumers to compare cards on a like-for-like basis, to be drawn up by September.

His letter follows two hearings by the committee last month, in which he told credit card chiefs they "needed their heads banging together" and accused store card providers of "highway robbery".

Mr McFall accused card providers of allowing consumers to "tiptoe their way to disaster" and said that terms and conditions in small print were "impossible to read".

The committee criticised small print and demanded to know why rates are as high as 32.5pc when the Bank of England base rate is only 3.5pc.

Mr McFall said yesterday: "Consumers at present have little chance of fully understanding the way in which charges on their cards are calculated. It is difficult to compare products and - where charges are high - too easy for some cardholders to build up unaffordable debt.

"There have been discussions for some time as to how to address these problems but not enough has been done. I want the industry to bring specific proposals to the committee in September, so that we can get a public commitment from the main issuers at a hearing in October to a way forward."

Providers agreed in principle to bring forward plans, which they originally intended to outline at the end of the year.

While consumer groups welcomed Mr McFall's comments, they remain cautious. Ed Mayo, chief executive of the National Consumer Council, said: "It is all too easy for credit companies to say they are going to do something, but talk is cheap. "We have a serious problem on our hands.

Easily available credit is pushing people deeper into debt. Nearly 100 people a day are declaring bankruptcy from the sheer weight of their unsustainable debt. We need to make sure that people fully understand the terms and conditions of any credit deal before they sign up to an agreement."

Figures from Datamonitor show people in the UK have on average £3,400 of unsecured debt each, compared with £2,200 five years ago.