In a joint statement from the summit held between the Government and the credit card companies, the credit card companies have agreed to help customers who are struggling with repayments.
It was agreed that the credit card companies would report back within 2 weeks with proposals on how they will deal with borrowers struggling with debt.
The statement said:
“The industry agreed that where a not for profit debt advice agency has formally notified that a consumer is in serious discussion with that agency on a draft debt repayment plan then the credit card company will suspend collections activity whilst these discussions continue provided that they are concluded within 30 days, with the option of extending a further 30 days subject to demonstrable progress being made but not yet concluded.
The group made good progress in discussing the issue of risk-based repricing which is leading to high increases in some individuals’ bills. They will develop a statement of fair principles in two weeks for risk based re-pricing decisions. Those principles would address issues such as proportionality, frequency and transparency. The purpose is to help borrowers manage their debts during the downturn.”
The full statement from Department for Business, Enterprise and Regulatory Reform (BERR) can be seen here:
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