FLA response to Competition Commission Statement on store cards inquiry

FLA (Finance & Leasing Association), whose members provide asset finance, motor finance and consumer finance – including store cards – is reassured by the Competition Commission’s decision to put its inquiry into store cards in a wider context.

Martin Hall, Director General of FLA, representing almost all the major store card providers, commented: "We have always maintained that store cards should not be looked at in isolation. They are a small part of the highly competitive consumer credit market. New business generated through store cards amounted to £5 billion in 2003, equivalent to just 2.5 per cent of total consumer credit. For many, store cards offer convenience and other benefits."

FLA has already introduced a number of initiatives aimed at ensuring that consumers benefit from open, fair and responsible lending. They include:

Transparency. Since 31 March 2004, all FLA members have provided clear upfront information in a Summary Box – prominently displayed in all marketing literature, it sets out the key features of their store card agreement, including APR rates and any other charges. This initiative has been welcomed by the Consumer Minister, Gerry Sutcliffe.

Disputes. FLA Complaints Scheme is available to any consumer involved in a dispute with an FLA member firm. Although there are few complaints, the Scheme ensures speedy settlement of any disputes.

Training. FLA is working with members to improve training for retail staff who sell store cards.

Responsible lending. FLA’s Lending Code has tough provisions on issues relating to consumer information and dealing with debt difficulties sympathetically. FLA is currently looking at how its code can be strengthened further to deliver responsible lending.