The UK Government has today (2 July) announced plans to ban credit card cheques after a campaign by local MP Russell Brown.

The Government has today published its Consumer White Paper which outlines plans to introduce measures to assist people facing difficulties with debt and clampdown on irresponsible lending.

Included in the White Paper is a plan to ban lenders from sending customers unsolicited credit card cheques. The blank cheques are sent out by card issuers to their customers giving them an alternative way to spend on their card account.

They have proved controversial because consumers incur handling fees for using them, there is no interest-free period as with a card, and they do not command the same level of protection for customers if things go wrong.

Local MP Russell Brown has campaigned for the cheques to be banned, and earlier this year he tabled his own Bill to get them outlawed. He later withdrew his Lending (Regulation) Bill after the Government gave him assurances that they would take action and include his proposals in their own legislation- ensuring they will become law much quicker.

The MP has welcomed the Government’s announcement. He said, “I’m delighted the Government is set to take this action to protect consumers, which I proposed earlier in the year. Through credit card cheques some lenders have been seemingly determined to force credit down the throats of consumers, tempting some to take on debt they can’t afford- and potentially leading to unnecessary and avoidable consequences like bankruptcy.

“So by proposing measures in Parliament I’m pleased to have helped open up the debate, which has led to the publication of this strategy that will provide greater protection for consumers from irresponsible lending.”

The MP has also welcomed Government plans to appoint a new Consumer Advocate to champion the interests of consumers. The Advocate will co-ordinate work to educate consumers and take action on behalf of consumers where a significant number have suffered a loss at the hands of the same business.

He added, “Consumers will have an advocate who is on their side, and who will have powers to demand redress for them when they have been ripped-off by a firm.”