Questions and Speeches

30/01/2006

         

Officials from the Department of Trade and Industry today detailed changes in the European Commission's proposal for an EU directive to harmonise consumer credit laws and regulations to the Lords EU Sub-Committee on Social and Consumer Affairs.

Speaking to the committee, chaired by Liberal Democrat peer Baroness Thomas of Walliswood, were Fiona Price, Director of Cross Market Interventions, and Hugh Rawson, Assistant Director, Consumer Credit, at the Consumer and Competition Policy Directorate of the DTI.

Baroness Thomas began by asking for an overview of the Commission's modified proposal set out in October 2005. Ms Price said there had been many changes which had broadly speaking been an improvement, but there were some concerns about details.

Ms Price explained the scope of the proposals had been narrowed. Student loans and secured lending were now excluded and the ceiling had been lowered from 100,000 euros to 50,000 euros.

The directive still provides for maximum harmonisation but allowed for greater flexibility, she said.

In addition, the Commission had introduced new proposals to prohibit restrictions on lending.

Information requirements were still of some concern, especial the detail on advertising, which could cause problems. UK regulations requiring the typical APR to be shown were replaced with a representative figure, which she felt could be misleading.

She said the duty to provide provision had been modified and there were now fewer concerns, although it was ill defined with respect to lending. There was also a concern over the overdrafts of credit unions where the original "light touch" had been replaced with greater regulation.

Ms Price said there could be advantages of maximum harmonisation as lenders would be subject a single set of rules, but these advantages would depend on what the rules were as there was a danger that the wrong rules could lead to consumers being less protected.

Baroness Thomas asked what was no longer the subject of maximum harmonisation and asked whether the UK would retain provision in areas not covered. Ms Price replied it did retain provision over the 50,000 euro ceiling but UK regulation had its own ceiling of £25,000 - although this limit was in the process of being removed.

Lord Moser asked whether the Commission's proposal was the best way of promoting a single market, arguing cross-border lending was largely theoretical as people rarely took part in it. Ms Price said the commission believed the different rules of member states lead to a need for harmonisation. However, she acknowledged that it was not clear that the most significant barrier was the issue of consumer protection rules; other factors such as lack of local knowledge and language difficulties were also significant.

Lord Moser suggested the hurdles were more legal than about consumer protection and it was not clear whether it should be the aim of the Government to overcome this. In response, Ms Price said the Government believed a single market was better for consumers.

Baroness Thomas questioned what the views of other member states were. Ms Price said they had not yet made them clear but the Austrian presidency had scheduled a meeting for February to discuss consumer protection when they would become more evident.

Conservative peer Earl of Dundee inquired as to the extent of changes harmonisation would lead to. Hugh Rawson replied there were three possibilities: to act without scope of directive, full harmonisation but with freedom to manoeuvre, and full harmonisation with no flexibility. The latter, he continued, would impact on UK legislation, especially with regards advertising, and changes would have to be made.

The Earl then asked what other expedients should be focused on by the Commission. Mr Rawson replied advertising, pre-contractual agreements, and forms of content were all subject to maximum harmonisation but there was a lot of flexibility and the UK would recommend this to the Commission.

Baroness Thomas queried whether it was a possibility to move a given set of rules from maximum harmonisation to a lesser form of it. Mr Rawson replied it was possible, but it was not achievable to opt for minimum harmonisation.

Baroness Greengross asked how the UK's high standards could be kept while achieving harmonisation, and whether the process would damage new member states. Mr Rawson said it was very much a question of balance in order to produce a single market. He added the two were not always conflict but it would be difficult for member states to reach maximum harmonisation as there was no "one size fits all" solution. However, the sharing of information and experience would prove a good thing to member states. There needs to be more discussion, he declared.

The witnesses were asked whether the UK was now committed to harmonisation. Mr Rawson answered that negotiations were still at an early stage and the Commission had shown a degree of flexibility. "They are not wedded to a particular approach," he said.

The Earl of Dundee inquired if the DTI was in contact with its equivalent bodies in other member states so alliances could be made over particular issues. Mr Rawson said they were in the process of doing this having talked to France, Germany and Poland to identify common views. "We are engaged in a constant exchange of ideas," he said.

Baroness Howarth asked whether the mutual recognition provision fitted in with other legislation. Mr Rawson replied the proposals had to be viewed with flexibility in mind and different rules could be introduced.

Baroness Thomas followed up by inquiring whether the Consumer Credit Bill fitted in with European proposals. Ms Price said there was a question over Article five concerning written confirmation of information.

The Chairwoman stated doubts had been expressed to the Committee about whether banking codes were sufficient and if loan agreements adequately protected the consumer. If this was the case in the UK, she wondered why would it not happen in other member states. Ms Price suggested this was an argument for strengthening the existing codes.

Baroness Greengross asked about the right of withdrawal contained in Article 13. Mr Rawson replied the modified proposal had clarified the right of withdrawal to "credit agreements" as opposed "contracts" because of industry concerns. There had also been concern from the consumer and enforcement side, he added.

Baroness Howarth suggested the assignment of rights to the consumer had not been brought to the attention of the Commission. Mr Rawson said the industry had made the Commission aware of this but it needed to be repeated.

Conservative peer Lord Trefgarne proposed it would be unfortunate if new restrictions affected credit unions. Ms Price agreed and said she would like to see these covered by an exemption owing to their small size.

Treasury Select Committee hears from consumer groups on financial inclusion Tuesday 24 January 2006 |Parliamentary Committee

Both the Government and the financial services industry could do more to increase the amount of financial inclusion in the UK, MPs heard today.

Giving evidence to the Treasury Select Committee were Teresa Perchard, Director of Policy at Citizens Advice, Mike Barry, Debt project supervisor at Blackpool Citizens Advice, Claire Whyley, Deputy Director of Policy at the National Consumer Council and Mick McAteer of Which?.

Responding to the opening questions on basic bank accounts, Ms Whyley said that the model was not appropriate as it did not offer the benefits of financial inclusion or encourage people to change the way they managed their money. There needed to be more consultation on what services people required, she added.

Labour MP Sally Keeble asked if there needed to be a universal service obligation on banks to provide basic accounts.

In response, Ms Whyley said that she would not advocate such an obligation at this stage but maybe there should be one introduced later. It was important to get the policy right first and then decide the best mechanism for delivering it, she asserted. She also said that she was very concerned about a scheme that would make the opening an account the end result.

In reply to a further question on whether the Government's target to cut banklessness was appropriate, Ms Perchard said there was nothing quite like a number for concentrating the mind. She also argued that the production of figures on which banks were performing the best would help to get the numbers up.

Ms Whyley added that there needed to be a qualitative as well as a quantitative approach.

Conservative MP Peter Viggers turned the discussion to cash machine charges and the presence of free ATMs.

Mr McAteer asserted that the Treasury's last report on charges had led to positive reaction from the Post Office but this should be set against the growing number of charging machines. Such machines were growing at five times the rate of free machines, he noted, adding that there was a problem when vulnerable people do not have access to free machines.

There should be wider consultation with the local community before free ATMs were shut down, Ms Whyley said.

Ms Perchard stated that she supported the Post Office's bid to become a member of the LINK scheme which would expand the ability of people to withdraw cash. She added that she was not sure why LINK had not allowed the Post Office to join.

Mr McAteer said that he felt the reason for banks being reluctant to allow the Post Office to join the scheme was that they were worried about the potential impact of supermarkets joining the system.

He added that the Post Office's membership would service two policy purposes, tackling financial exclusion and introducing competition in the banking sector.

The Treasury should also be looking at some form of universal service obligation for free ATMs in the expectation that the banks were not playing ball, he said.

Mr Viggers then noted that the Post Office card had proved more popular than expected since the introduction of the direct payment of benefits.

Ms Perchard agreed, asserting that people liked the Post Office and had 'voted with their pens', despite the ten steps to opening a Post Office card account.

People like to deal with the Post Office, Ms Whyley noted, adding that there was a trust gap between the Post Office and other financial institutions. The basic bank account did not offer many benefits so people had decided to stick with what they know and trust, she said.

However, Mr Barry noted that the local housing allowance could not be paid into the accounts so there was still some degree of financial exclusion.

Ms Whyley agreed, saying that those with Post Office card accounts were not totally financially included due to the limited functionality of the accounts. There was also no incentive to move into basic bank accounts, she said.

On a similar topic, Ms Perchard explained that some people in Blackpool had gone without benefits as they did not have a bank account and were not able to deal with the process of getting a Post Office card account. She said it was important to recognise that such people, who often suffered from mental health problems, needed more support than mainstream consumers.

Asked for her view on the phasing out of Post Office card accounts after 2010, Ms Perchard then insisted that there needed to be a strategy for helping people make the transition. The system needed to transform into another form of payment with more functions attached to it or efforts needed to be made to transfer people into basic bank accounts. Four million people relied on benefits, she noted, and it was not possible to suddenly close the door on this particular payment method.

Ms Whyley agreed that significant investment was needed in the transfer process. It would be very stressful for people to move over to a new system and the basic bank account product also needed to be improved, she said.

Labour's Andrew Love went on to note that the NCC had suggested a redesign of basic bank accounts. He asked whether banks would be willing to go along with this given the amount they had already spent.

Responding, Ms Whyley conceded that banks had yet to be convinced that certain functions were wanted by people on low incomes. However, she argued, banks had a responsibility to this sector of the market and should invest in finding out what they wanted.

Ms Perchard noted that some banks already offered facilities such as small buffer overdraft zones and argued that this raised the question of why some banks could do this and some could not.

Liberal Democrat Susan Kramer was the next MP to ask a question, focussing on the subject of access to affordable credit.

Ms Whyley revealed that 7.8 million people were excluded from mainstream financial credit, a figure based on those who had applied and been rejected, she explained.

In response to a further question on illegal lending, she said that the Department of Trade and Industry were carrying out some research and were due to report in June. She added that incidences of such lending were incredibly concentrated and problem areas could be identified by looking at indicators such as type of housing and unemployment.

Ms Perchard explained that the DTI had invested in more enforcement in Birmingham and Glasgow to tackle the problem. Some men had gone to jail in Birmingham, using old legislation, she pointed out.

Ms Kramer asked whether it was 'barking up the wrong tree' to try and make mainstream providers take on the financially excluded. She asked whether alternative structures should be examined, given that providers such as doorstep lenders were trusted and convenient.

Ms Whyley conceded that the mainstream would not open its arms and welcome all customers but, she argued, there were more ways for it to get involved.

She also said that alternative structures created divisions. Any alternatives should be stepping stones to the mainstream, she insisted.

However, Ms Perchard agreed that home credit was very attractive due to the small weekly repayments and flexibility to skip a week. Flexibility like this was not found in the mainstream, she pointed out.

Responding to Labour MP George Mudie's questioning on the deduction rights off benefits of private lenders, Ms Perchard explained that £8.40 per debt could be deducted from weekly income support.

She pointed out that some lenders would be more prepared to lend knowing that they could recover some of the debt from benefits. However, she said that the system needed to be looked at in order to create a better scheme.

She also explained that the total cost of creating the system was £10 million.

Following up Mr Mudie asked why deductions from benefits were needed given that there were legal steps that could be taken by lenders to reclaim money in court.

Ms Perchard answered that the scheme was intended for third sector lenders and noted that there may have been some mission creep if it extended to private sector lenders. A wide variety of other lenders would not be happy with getting a small amount each week so it was not aimed at them, she pointed out.

Chairman of the committee Labour MP John McFall asked about data sharing, noting that 88 per cent of banks carried out no checks on affordability when offering loans.

Her organisation supported voluntary initiatives to share data across lenders, Ms Perchard maintained. Such sharing ought to improve the quality of decisions, she asserted.

She also pointed out that there had been a number of cases where people on benefits could obtain huge credit card limit or loans. This could not be in anyone's interest, she said.

Mr McAteer agreed, saying that there were a number of improvements that the banks could make to make lending more responsible.

Labour's Andrew Love asked about the role of the non-market sector and the social fund in providing loans to the financially excluded.

Ms Whyley maintained that the social fund could not currently meet the demand with half the applications for budgeting loans currently refused. There was a role for more state sponsored interest free loans, she said.

Ms Perchard said that she would like the eligibility for social fund to be extended to anyone on a low and fixed income. Borrowing for such people was about smoothing over the ups and downs of the budget for essential items, she said.

The social fund had not kept pace with the requirements of its users, she argued, noting that it was difficult to borrow money for things like monthly seasons tickets and clothes to help people take up a job.

Addressing the question of whether the third sector had the necessary professionalism to provide loans on a large scale, Ms Whyley said that there was a lot of scope for the commercial sector to work with them to help them become more efficient and take advantage of economies of scale.

Mr McAteer explained that he had set up a credit union in Hackney as there was a huge demand for credit unions. There was an even bigger demand for loans, he pointed out, but the credit union could not currently cope.

He added that he would like to see the Government underwriting some of the loans to help to meet the demand and would like to see clients who got into trouble with loans referred to credit unions.

The committee then moved on to discuss financial capability with Conservative MP Brooks Newmark asking whether the Financial Services Authority was the right body to be coordinating financial education.

Ms Whyley said that it was never clear how financial inclusion fitted in with their strategy. Without a systematic strategy, she argued, financial education would continue to be fragmented and uneven.

Ms Perchard added that the FSA had an obligation to promote financial understanding so they needed to play a role. She said she was excited about the ten year plan to promote financial education and bring people together to find out what needed to be done.

The FSA were the only body who could raise substantial funds for financial capability through some sort of levy, she argued.

Mr McAteer however disagreed that the FSA should lead the financial education strategy

The FSA was already struggling with its current workload, he argued, and he would prefer to see an operational independent body, similar to the financial ombudsman, to deliver a financial education strategy.

The Treasury should also take more responsibility and be more interventionalist, he said.

Mr Newmark went on to ask a question about the transparency of financial products.

Ms Perchard said that although she had seen some improvements there was still a long way to go to get simple language into information on financial products. It was often felt that it was not in the business interest for consumers to totally understand financial products, she asserted.

Regulation had a role to play to reward firms who did inform their customers and punish those that did not, she said.

Liberal Democrat MP Lorely Burt asked a question about basic financial advice.

Mr McAteer agreed that there was a need for alternative sources of advice. People were desperate for advice on pensions for example, he said. Lots more could be done to improve access, he added.

Although, there were many people providing advice, it would be better done under a single entity, he argued.

In relation to her organisation's role on providing basic financial advice, Ms Perchard pointed out that they had over 3,000 locations with over 90 per cent brand recognition and would be well placed to play a major role. However, they were more interested in preventative work and would not want to take on extra work without the resources, she said.

Turning to the subject of saving, Mr Viggers asked whether those on low incomes could afford to save.

Mr McAteer said that the reason some people did not save was unaffordablilty and the record levels of debt and the housing market. There was also a lack of trust in the providers, he asserted.

Ms Whyley added that saving for the future was not on the radar for those on low incomes. They only looked at day to day saving or putting a small amount away for a rainy day, she said. If some of the other problems of financial exclusion could be tackled there would be more potential to save, she pointed out.

There was a real tangible benefit to matched saving schemes, she added.

Mr McAteer said that he did not accept that regulation was preventing the industry meeting the Government's target on saving, given that the cost of regulation was just a small cost compared with the cost of marketing saving products.

Lords Report Stage - Consumer Credit Bill

Wednesday 18 January 2006 - Debate - Report Stage

The Government's Bill to protect borrowers from unfair lending practices has completed its Report stage in the House of Lords and will now proceed to Third Reading.

A central area of debate during the day's proceedings concerned the Bill's provisions on unfair relationships between creditors and debtors.

As the Bill stands, the term unfair relationship is left undefined and therefore it would be at the discretion of the courts to decide whether a relationship was unfair on a case-by case basis.

Conservative trade and industry spokesperson Baroness Miller of Hendon sought to amend the Bill to allow provisions to be made for the Secretary of State to have the ability to make regulations about the practices that were deemed unfair.

She recognised that it would be impossible to define every single unfair practice, but argued that "if there is a practice which is clearly unfair or undesirable, there is no reason why the Secretary of State should not say so".

Liberal Democrat trade and industry spokesperson Lord Razzall agreed and argued that the matter cannot "simply be left to the court" to decide what practices were unfair.

Lord Sainsbury of Turnville said that business had a considerable amount of guidance issued to them about unfair practice. The new test of unfair relationship would therefore not impose undue uncertainty on business.

Introducing definitions of unfair practice would be overly restrictive and would not give the courts the necessary flexibility to consider all relevant circumstances and then make a decision about the nature of the relationship in an individual case, he argued.

Pressed by Lord Razzall about the guidance to be issued by the Office of Fair Trading, the Minister stressed that this guidance would not define unfair relationships, but provide the framework for the OFT's new role to take action against lenders engaging in unfair practices.

He gave a commitment that the provisions on unfair relationships would not come into force until the OFT's guidance had been issued.

Lord Beaumont of Whitley argued that when considering unfair relationships the vulnerability of the household concerned should be taken into account by the courts.

Lord Sainsbury said that this amendment was unnecessary as the flexibility in the Bill allowed for any relevant issue to be brought up in court. "If a debtor raises an issue the court may consider it", he said.

Baroness Miller of Hendon went on to call for provisions to be made in the Bill to place a duty on creditors to ensure that proposed debtors had the means to pay off their debt.

The Minister responded that whether a creditor had looked at a debtor's ability to pay would be one of the many things that the court would consider when looking at whether the relationship had been unfair.

Turning to the role of the OFT in regulating the activities of lenders, Lord Razzall argued that the guidance issued to lenders by the OFT should include a duty to lend responsibly.

Lord Sainsbury said that the OFT as a licensing authority would issue licences to businesses which were fit to conduct consumer credit.

Therefore the guidance issued would take a negative form, because it would tell affected persons what types of conduct might expose them to OFT enforcement action, he explained.

The positive duty would encourage "a tick box culture where businesses would claim both responsibility and fitness in lending simply because they tick all the boxes on the list", he said.

The Government did not believe that this approach would help encourage responsible lending, he added.

Continuing with the role of the OFT, Conservative trade and industry spokesperson Lord De Mauley argued that the OFT should only be able to use its powers when it had reasonable grounds for believing that a licensee has breached the licensing criteria.

The current provisions in the Bill left too much at the OFT's discretion, he argued.

Government Treasury spokesperson Lord McKenzie of Luton stressed that "the OFT adheres to the Cabinet Office enforcement concordat", before arguing that there were adequate safeguards in the Bill to prevent the OFT from abusing its powers.

The amendment would severely limit the effectiveness and flexibility of the OFT's powers, he added.

Lord De Mauley also called for OFT guidance to be approved by the Secretary of State. This was rejected by Lord McKenzie on the grounds that it would affect its independence.

In other debates, Baroness Miller of Hendon expressed concern about the Bill's impact on foreign companies lending to UK consumers. Lord McKenzie said that there was an ongoing court case looking at this issue and that it would not be sensible to act in this area until the outcome of the case was known.

During the day's proceedings the Government made a number of minor technical amendments to the Bill.

The Bill proceeded.

MPs debate Equity Release Schemes

Tuesday 17 January 2006 - Debate - Adjournment

Financial Secretary to the Treasury John Healey has stressed the importance of ensuring that consumers have all available information before entering into an equity release scheme.

Speaking today in Westminster Hall, the Minister told MPs that the Financial Services Authority (FSA) was in discussion with industry and consumer groups about the standards of the advice issued.

Regulation on equity schemes was enacted by the Regulation of Financial Services (Land Transactions) Act 2005 and the secondary legislation that would be brought forward as a result of this Act would be consulted on shortly, he explained.

Following the consultation, the FSA would draw up and publish proposed rules regarding sales of home reversion plans, he said.

When the framework was in place, firms would have to apply to the FSA in order to sell these products, he explained. The FSA took a firm line with those companies who did not address the issues that it highlighted to them, he noted.

Equity release schemes were important products for many consumers, but were not to the benefit of all, he added.

Shadow Treasury Minister Mark Hoban said that there was a legitimate demand for equity release schemes, particularly for those who were "asset rich but cash poor", such as pensioners.

However, he continued, the sale of such products needed to regulated properly. He went on to express concern about the delay in the regulation of the home reversion market, given the passing of the 2005 Act.

Similarly, Liberal Democrat lead Treasury spokesperson Vincent Cable noted that there was a loophole in the regulatory framework, until the new regulations were enacted.

He also argued that greater efforts needed to be made to ensure that consumers received adequate independent advice.

Treasury Select Committee member George Mudie opened the debate by noting his concern that these type of products were targeted at elderly people, many of whom were vulnerable.

It was imperative that they received the right kind of advice about these products, he asserted.

MPs debate Deferred Pensions

Pensions Minister Stephen Timms has defended the financial assistance scheme (FAS) for pensioners of bankrupt companies, insisting that the £400 million of funding was adequate.

Speaking in a Westminster Hall debate on Deferred Pensions, Mr Timms explained that the purpose of the FAS had been to get help to those who needed it quickly. Funding was fixed until after 2007-08, the Minister stated.

Introducing the debate, Labour backbencher Ashok Kumar had drawn attention to the winding up of the Texon pension scheme. He suggested that the scheme had been mismanaged.

Dr Kumar went on to press for the extension of the FAS to cover those within ten to 12 years of retirement.

The administrators of the Texon pension scheme had not breached regulations, Stephen Timms told MPs, but added that the pensions ombudsman was still examining individual cases.

The Government was considering the scope of the FAS, the Minister continued, but stressed that no additional funding would be made available until after 2007-08 at the earliest.

He resisted Dr Kumar's suggestion that money should be sourced from unclaimed assets held by banks, stating that, if this could not be returned to owners, it should be 'reinvested in the community'.

Questions

Hurd - European Bank for Reconstruction and Development / Pension payments
Thursday 19 January 2006 - Written Answer

Mr. Hurd: To ask the Chancellor of the Exchequer further to the answer of 20 December 2005, Official Report, column 2797W, on the European Bank for Reconstruction and Development, whether the bank has approached shareholders since Statutory Instrument 1991 No 757 was made to ask permission to increase payment to employees and retirees for the specific purpose of paying income tax; whether UK nationals are obligated to use pension payments made to them by the bank to buy a taxable investment; what the value has been of pension payments made to employees and retirees by the bank since its inception; and what the most recent valuation is of the assets held in both schemes.

Dawn Primarolo: The European Bank of Reconstruction and Development provides for retirement by making lump sum payments to employees to be invested by them to provide retirement income. As stated in the answer of 20 December 2005, Official Report, column 2797W, a payment made by the bank from the bank's funds to enable an employee to purchase retirement income is, as an emolument of his employment, exempted from UK income tax by paragraph 14 of Statutory Instrument 1991 no 757.

The emolument paid to staff is determined in accordance with the rules of the bank's retirement plans. At the creation of the bank, its consulting actuaries advised that, based on a range of actuarial assumptions, the lump sum benefits under the plans would enable a married participant with 30 years service to purchase a single life annuity, with contingent spouse pension and indexation, equivalent to 70 per cent. of final EBRD gross base salary. This 70 per cent. figure was purely indicative and was not a commitment to provide a retirement income of such amount. Any income would depend upon the rate of return of the investment. However, this gross salary was initially calculated as the employees' net salary grossed up by the bank's own internal income tax. In 1992 a report by the bank's consulting actuaries found that this approach led to a level of benefits lower than in comparable organisations. Following this report the board of directors - as representatives of the bank's shareholders - on 15 December 1992 decided that the appropriate measure of gross salary for pension purposes would be one that took account of average UK tax rates. Since UK tax rates were, and are, higher than the bank's internal tax, the level of lump sum necessary to generate the same potential level of income, using the original actuarial assumptions, was greater.

As a result, both bank and employee contributions to the retirement plans which provide the lump sum payments were increased. The tax position of these lump sum payments remains as set out earlier in this answer. As stated in the answer of 20 December 2005, Official Report, column 2797W, retirement income arising from the investment of the payment is liable to income tax in the normal way.The EBRD does not make pension payments, it provides a lump sum which is intended for individuals to make investments to provide income in retirement. The form of these investments is for individuals to determine.

The bank has two plans which support the payment of lump sums at retirement: the Final Salary Plan and the Money Purchase Plan. The payments made since the inception of the plans to end March 2005 - the latest date for which audited figures are available - are £50,993,820 and £47,683, 290 respectively. As at 31 March 2005, the value of assets held by the bank in respect of the Money Purchase Plan is £77,628,896 and the value of the assets held by the bank in respect of the Final Salary Plan is £73,810,750.

Bone - Credit Card Charges
Tuesday 17 January 2006 - Written Answer

Mr. Bone: To ask the Secretary of State for Trade and Industry if the Government will introduce legislation preventing credit card companies sending out credit card statements which are received by customers too late for customers to avoid incurring late penalty charges and interest; and if he will make a statement.

Mr. Sutcliffe: The Government have no plans to legislate on this matter. However, in 2004 the Department made regulations that require lenders to give consumers clear information about the key features of credit products before and at the time the agreement is made, including the way in which interest is treated and on default charges. This will help consumers to understand credit products better, shop around for better products and increase competition among UK credit providers.

The Consumer Credit Bill will further improve consumer rights by giving them more effective options to challenge unfairness in credit relationships and to resolve disputes with lenders. It will also improve the powers of the Office of Fair Trading to take action against lenders who exploit or harm consumers.

McCabe - Credit Card Companies (Recognition of the British Forces Post Office) Tuesday 17 January 2006 - Written Answer

Steve McCabe: To ask the Secretary of State for Defence if he will take steps to ensure that all UK credit card companies recognise British Forces Post Office addresses as valid addresses for the purpose of making credit card transactions.

Mr. Ingram: UK credit card companies already recognise British Forces Post Office (BFPO) addresses as valid addresses for the purposes of making credit card transactions. Also, most companies providing goods and services via the internet and telephone - where "card not present" fraud control measures are necessary - do accept BFPO addresses. Ultimately it is a commercial decision for any company to determine how and where they will provide services. Even so, for the minority that choose not to deal with BFPO addresses, their issues are being explored further by the Association for Payment Clearing Services (APACS) with the assistance of the MOD.

Campbell, G - Dormant Accounts (Northern Ireland)
Tuesday 17 January 2006 - Written Answer

Mr. Gregory Campbell: To ask the Chancellor of the Exchequer how much money is estimated to have been in dormant accounts in financial institutions in Northern Ireland in 2005.

Mr. Des Browne: As announced in the pre-Budget report 2005, based on the definition that unclaimed assets should generally cover accounts where there has been no customer activity for a period of 15 years, initial record searches by the industry suggest that several hundred million pounds may currently lie unclaimed. This figure is for the UK as a whole.

Rosindell - Elderly People (Fraud)
Thursday 12 January 2006 - Written Answer

Andrew Rosindell: To ask the Secretary of State for the Home Department what steps the Government have taken to protect the elderly from fraud; and what recent discussions he has had on this issue.

Paul Goggins: A large amount of fraud can be prevented if people take simple precautions to protect themselves. Government therefore takes an active role in improving public awareness of fraud and how to avoid becoming a victim. These measures are targeted at all members of the community.

The Government publishes fraud prevention advice on the Home Office, Department of Trade and Industry and crime reduction websites and the Home Office published (jointly with the banking industry) a card fraud prevention leaflet that contains useful advice for members of the public. The Office of Fair Trading (OFT) and Financial Services Authority (FSA) websites also contain material on common scams and how to avoid them.

The Government recently launched Get Safe Online, the UK's first national internet and computer security awareness campaign. The campaign is a joint public and private sector initiative, primarily targeted at consumers and micro-businesses, which aims to raise awareness of internet security threats (including online fraud) and help users to protect themselves.

The Government have also set up, in conjunction with the private sector, a consumer website where people can get advice on protecting their identity. This has been followed up by a leaflet and poster campaign, with material distributed to consumers by police stations, libraries, Citizens' Advice Bureaux and Passport and Driver and Vehicle Licensing Agency (DVLA) offices.

To improve the law enforcement response to fraud, the Government have made available additional funding for the City of London police force, matched by funding from the Corporation of London, to enable it to take a lead role in fraud investigation not just in the City but across London and the south east. The Fraud Bill, introduced in the House of Lords in May, seeks to clarify and simplify the laws on fraud to better equip police and prosecutors to deal with modern crimes and keep up with new and inventive frauds.

Home Office Ministers and officials hold regular discussions with law enforcement and industry bodies about a number of fraud-related issues.

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