Credit card bosses came under fire from MPs yesterday for tempting people into debt by inviting them to use unsolicited cheques sent in the post. Marketing material suggests the cheques are a convenient way to pay for items when a credit card is not accepted. But the annual percentage rates are often significantly higher than those for regular purchases and interest is charged from the moment the cheque is cashed.
Yesterday the heads of four credit card firms – hauled in to give evidence to a Commons committee – insisted the cheques were just another way for customers to pay. But MPs said they could encourage people to fall further into debt – and asked why the firms persisted in sending cheques to customers who had demonstrated they did not want them by not using them in the past. Sir Fred Goodwin, chief executive of the Royal Bank of Scotland, defended the policy, saying: ‘I don’t think there is anything wrong with being proactive. Every business I know tries to get customers to use their goods or services.’
(Daily Mail Wednesday 27th October 2004)