New Clause 1 - Credit-token specification
Consumer Credit Bill
3:44 pm
Mr James Plaskitt (Warwick and Leamington, Labour)
I beg to move, That the clause be read a Second time.
The purpose of new clause 1 is to end the unwelcome practice of the unsolicited issue of credit card cheques. I make it clear that the purpose of the amendment is not to end credit card cheques themselves, simply their unsolicited issue. At the moment credit card cheques are sent out to 16 per cent. of all households in the United Kingdom, which means that millions of people receive them. They are sent repeatedly, often in multiple issue, and they are virtually always unsolicited.
The Select Committee on Treasury has taken much evidence on this practice. That evidence suggests that those cheques are sent to a greater than average proportion of cardholders who are already experiencing some form of financial difficulties. I find it hard to see a justification for the existence of the cheques at all, but the new clause does not drive that far. Credit card cheques are not really an extension of the cards, as the industry argued when giving evidence to the Treasury Committee.
I recently met Detective Chief Superintendent Ken Farrow of the City of London police fraud squad, who is making a special investigation of the matter. He told me that criminals are able to use credit card cheques to commit fraud because cheques are not secure and because they are sent out unsolicited. That is a significant additional factor that must be borne in mind when considering the consequences of issuing those cheques.