By Marcus Leach
The operation of store cards is going to be covered by a new voluntary code, drawn up by the British Retail Consortium (BRC) and the Finance and Leasing Association (FLA).
Store cards already account for fewer complaints to the Financial Ombudsman than any other form of credit. The new agreement means retailers won't offer store card customers special discounts or promotions for the first seven days after taking out one of the cards. There will be a ban on giving staff commission for promoting store cards and businesses are making a pledge on staff training.
The Government has welcomed the package.
"The public told us that consumers can be tempted into taking out a store card by being offered a discount at the till. We've listened to these concerns and have worked with industry to develop a strong package of measures in response," Financial Secretary to the Treasury Mark Hoban said.
British Retail Consortium Director General, Stephen Robertson, welcomed the compromise.
"We know consumers value store cards as a route to convenient, short-term credit. There are nearly 13 million store card accounts in the UK but credit limits are low and many customers pay off the balance each month," he said.
"Introducing a week-long separation between taking out a store card and receiving discounts is a common sense compromise which will give people enhanced consumer protection with access to the benefits those cards provide."
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