§ Mr. Letwin
To ask the Secretary of State for Trade and Industry what plans she has to ensure that FSA rules prevent credit card companies from(a) setting minimum payments below the interest charge,(b) failing to show the APR clearly on statements and(c) implying that an interest-bearing period is interest-free. 
§ Miss Melanie Johnson
[holding answer 7 March 2003]The provision of information on credit card statements is regulated by the Consumer Credit Act 1974, and in particular by the Consumer (Running-Account Credit Information) Regulations 1983 (SI No. 1570/83). These require statements provided for running-account credit agreements, such as credit cards, to contain the following information:
- any opening balance on the account;
- the date of any movement on the account;
- the amount of any payment on the account;
- the amount of any drawing on the account; and
- the amount of any interest or other charges on the account.
Where a statement shows that interest has been applied to the account, it must contain either sufficient information for the customer to be able to check the calculation of that interest; details of the rate of interest that has been applied; or a statement indicating that the rate of interest applied will be provided upon request.
The form and content of consumer credit advertising is governed by the Consumer Credit (Advertisements) Regulations 1989 (SI 1989/1125). These are enforced by the Office of Fair Trading, and I understand that the OFT has investigated a number of credit providers who have advertised interest-bearing agreements as being interest-free.
The practice of some credit card providers of reducing the minimum require monthly repayment is one that I highlighted in my response in January this year to the Second Report of the Governments' Task Force on Tackling Overindebtedness. I stated then that I was worried about the effects that this practice can have on 270W consumers, and in particular that it can only lead to an escalation of the total amount owed and the time required to repay it. stated that the Government would therefore be considering how consumers might be given better information about the effects of a low minimum payment.
To that end, and as part of the review of the Consumer Credit Act that I launched in July 2001, I shall be publishing a consultation document on the simplification of the credit advertising regulations in the summer. As well a.; inviting comments on minimum payments, this will also look at how consumers can get better information in general about credit cards that will enable them to compare offers from different providers. In advance of this consultation, the DTI is in regular discussion with the credit industry and consumer bodies on the scope for a common format for the provision of key information, including details of interest-free periods and the calculation and advertising of APRs.