New front on credit card row

THE Treasury Select Committee investigating the credit card industry is expected to launch a fresh attack on the Government and the Office of Fair Trading in its hearings this week.

The committee will question OFT chairman John Vickers and Gerry Sutcliffe, the Consumer Minister, on Tuesday. It will be looking for signs of decisive action over what it sees as widespread abuses.

Vickers is likely to be asked about progress with his inquiry into store cards, where interest rates can reach 30%.

He promised the investigation when he appeared before the committee in September. He will be able to cite his intervention against Marks & Spencer last month when the OFT ruled the store chain's efforts to turn its loyalty cards into credit cards was in breach of the Consumer Credit Act.

A key feature of any proposed legislation will be the setting of a standard method for calculating annual percentage rates (APRs). The wide variety of methods for making the calculation has been seized on by MPs as a prime example of how consumers can be misled over credit card costs.