Insolvency body calls for ban on store card sales

Wednesday, 24 February 2010 10:52

By myfinances.co.uk staff

Insolvency trade body R3 has called for a ban on retail staff being allowed to sell store cards to consumers.

The organisation said 66 per cent of its members have dealt with personal insolvencies involving people who have signed up for the cards without fully understanding them or realising that they are entering a legally-binding contract.

A further 78 per cent believe many consumers unwittingly go over budget on store cards because they do not consider spending on them to be as "real" as using cash.

In one case, a couple ran up a debt of £150,000 on ten store cards buying clothes and toys for their two children, while in another incident, a man who was declared bankrupt with debts of £384,000 was found to owe £125,000 on more than 20 credit and store cards.

R3 has therefore called for a ban on the "irresponsible practice" of allowing shop staff with no formal financial qualifications to offer the cards at checkouts.

The organisation's president Peter Sargent said: "Store cards must be handled just like any other credit card."

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