The Labour Government has called in the credit card companies to tell them to stop imposing unfair massive interest hikes.

Whilst most credit card companies act responsibly, we are seeing recent evidence of pockets of bad practice where some lenders are hiking up people’s rates massively without adequate notice or any justifiable explanation claiming that they now pose a higher risk.

The Government wants to stop these unfair practices and if there is no action by credit card companies to stamp these out then the Government will refer them to the Office of Fair Trading – the consumer watchdog has recently been given tough new enforcement powers to outlaw unfair lending practices.

Bob Laxton, MP for Derby North said:

“At a time when families are really struggling through this downturn the last thing they need is unfair massive interest rate hikes on their existing debt and with next to no notice.  There can be no justification for some of the evidence we are seeing of people having their interest rate doubled overnight and without any reasonable explanation.”

“Any credit card lenders indulging in this practice to boost their own balance sheets need to stop it and stop it now.  If they don’t they should know these practices will face investigation and action.”

“It is an issue of fairness that if credit card companies impose large rate increases they should be giving people alternative options and giving them proper notice of any changes so they have time to shop around for another deal or bring down their balance.  They should also treat people in difficulty at this tough time sympathetically and fairly in giving them breathing space to get back on their feet.”

“If you have any evidence of credit card companies hiking up interest rates in a completely unfair and unjustified way, get in touch with me and I will immediately pass it on to the Financial Ombudsman Service. And I will also pass on your evidence to the Government so that ministers really know what is happening on the ground.”