- Report details industry initiatives to benefit the consumer over the last year
- Industry makes progress on increased transparency and data sharing to support responsible lending

Today (25 October 2006) APACS, the UK payments association, launches its latest report into transparency and responsibility in the credit card industry. Previewed yesterday afternoon at a reception at the House of Commons, the report, - ‘Sharing Best Practice’, details the steps the industry has undertaken to benefit the consumer, and provides an update on responsible lending initiatives such as increased data sharing.

Over the past year the industry has focused its efforts on improving the information available to customers to help them make responsible borrowing decisions. Card companies have also continued to work together to agree guidelines for responsible lending.

Industry initiatives over the last year include:
* Extending the idea of the Summary Box first introduced in 2003, creating a version of the Summary Box for credit card cheques. To be included with all credit card cheques by the end of 2006, the Summary Box provides customers with clear information, and highlights key features like the Annual Percentage Rate (APR), interest rates, the length of the interest-free period and any charges that might be incurred.

*The introduction of standard terminology in the Summary Box, to help consumers understand better the terms and expressions regarding interest rates and charges.

*Agreement to increase data sharing. To help prevent over-indebtedness, a number of banks have committed to increasing the amount of data to be shared about cardholders’ behaviour in respect of credit card accounts. The aim of this initiative is to show banks the way consumers are using their cards, and to highlight those who are potentially in financial difficulty. It is proposed that data such as whether the cardholder is only making minimum repayments on credit cards, or the extent to which they are making cash advances, will be shared. It is planned that companies will start to share this data during 2007.

*Launch of the industry’s Best Practice Guidelines, bringing together in one report a set of guidelines developed by the industry to promote responsible lending and increased transparency. Many of these guidelines are already enshrined within the Banking Code, with new initiatives to be submitted to the Banking Code review next year.

*Launch of the APACS consumer advice series, a set of downloadable, reader-friendly guides to help cardholders to make sensible decisions about choosing and using credit cards. Recent guides have focused on using cards abroad, cards and students and understanding credit records, and are available at http://www.choosingandusing.com/

Paul Smee, chief executive at APACS, says:
“The past year has seen the credit card industry make significant progress on the transparency agenda. The results of our initiatives can be seen in recent data, which suggests cardholders are becoming more responsible in the way that they borrow - reining in their spending and focusing on repayments.

“The industry has pledged to continue this process of innovation. We will also continue to engage with government, regulators and Members of Parliament as we take forward work on key initiatives including data sharing in 2007.” 

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.