OFT Demands Reform of Credit Card Cheques
Regulator says customers are ignorant of the true cost of credit card cheques
March 1st 2006
The Office of Fair Trading (OFT) has called for new legislation to govern credit card cheques after research has shown that customers are unaware of how much they'll be charged for using them.
Unlike normal credit card purchases, those made with a cheque are often treated as cash advances and charged at a higher rate of interest, usually with no interest free period, and with a one-off transaction fee. This can lead to customers being charged interest even if they clear their balance every month, a fact that the OFT says isn't made clear enough.
The OFT is demanding that card issuers be forced to make it clear exactly how much customers will be charged for using cheques, and how cheque purchases are treated differently than plastic ones. Unsolicited cheques sent with the credit card statement would also be banned under the proposed new rules.
Read More: OFT Report
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