After a year of trailers, the UK’s credit card issuers have finally got their act together and on a voluntary basis introduced a standard format for information about credit card deals in ads.
Topic: Consumer credit
Who: The Association of Payment Clearing Services ("APCS")
When: October 2004
Backed by a consumer survey suggesting that 99% of Britons supported the initiative, and anticipating new EU consumer credit laws in the pipeline, the APCS, a consortium of all the major credit card lenders in the UK, has agreed that a "Summary Box" of key credit data will appear in all marketing material for credit cards from the end of 2004 onwards. The Summary Box means that in all ads the prescribed information must be set out in the same form, using the same titles, in the same order.
The idea is to help the 1 in 4 consumers who apparently never read the small print and don’t find different credit card deals easy to compare.
Full details of the scheme are at www.summarybox.info/ but in the first section is APR, then there are "Other interest rates", then a section called "Interest free period".
This is followed by a box called "Interest charging information" dealing with the periods during which different types of transaction accrue interest e.g. "transaction date to statement date" then "Allocation of payments (e.g. "we will apply payments received in the following order: cash withdrawal fee; outstanding interest; transferring balances; purchases and cash").
The final categories of information are the minimum repayment, the amount of credit, fees, charges and default charges.
Why this matters:
This is a constructive step, although it has taken the industry quite a while to introduce it. Maybe they were waiting to see how the new Consumer Credit (Advertisements) Regulations 2004("CACRs"), in force since 31 October 2004, panned out.
A related aspect is that we now have two sets of disclosures that rules require should be all in one place in a credit card ad.
There are the CCARs disclosures which Regulation 4 (3) requires "shall be given equal prominence and shown together as a whole" and now we have the summary box which requires the same approach for slightly different but to some extent overlapping disclosures.
Not ideal, and with new consumer credit ad disclosure rules in the offing courtesy of a new EU Directive, do we face disclosure overkill and consumer turn-off?