Ban point-of-sale store card sales to protect the vulnerable, says insolvency trade body
Financially unqualified shop staff should be banned from selling store credit cards, according to insolvency trade body R3. Ahead of the closure of the Government’s credit card consultation tomorrow, insolvency experts warn that this practice contributes to the mountain of personal debt in the UK and entices vulnerable customers into debt.
Christopher Brown, Business Recovery & Insolvency Partner at Hart Shaw and R3 spokesman for Rotherham commented: “It is frankly irresponsible to sell credit over the shop counter as though it is no more important than buying a sandwich. Without proper training, shop assistants are inappropriately qualified to understand the consequences of what they are selling and often commission driven. While these cards are presented as innocuous, they can lure vulnerable people into debt. They should only be sold by people who have been sufficiently trained to sell financial products.”
A recent poll finds that the majority (72%) of Insolvency Practitioners believe it is too easy to get a credit card and two thirds (66%) have seen cases where people have signed up for store credit cards without any understanding of ‘what they had let themselves in for’. Case studies show individuals with unsecured debt of £300,000 and others with more than 30 credit cards at one time.
Christopher Brown concluded: “We broadly support the consultation which is considering raising monthly minimum repayment rates. This measure would encourage people to see store credit cards as short term credit rather than ‘a long term way of life.’”
