The government's Consumer White Paper 'A Better Deal for Consumers - Delivering Real Help Now and Change for the Future', published on Thursday, 2nd July 2009, contains proposals to ban unsolicited credit card cheques and to reform credit- and store card regulations.

As part of the government’s strategy of addressing credit and indebtedness issues the White Paper contains proposals for reforms to the regulation of credit and store cards aimed at giving consumers more control of their borrowing, and help prevent them accumulating debts that are difficult to pay off. These will consider: 

• placing  restrictions on the raising of interest rates on existing debts
• raising minimum monthly repayments to help restrict debt levels
• banning the practice of increasing borrowers’ credit limits without their prior consent
• in what order debts, built up on a credit card, should be paid off.

Lenders will have to check on consumers’ credit-worthiness before they borrow, explaining financial products fully including the consequences of not paying. There will also be new OFT guidance aimed at tackling irresponsible lending with which lenders must comply. 

Other proposals include:

• A ban on unsolicited credit card cheques, which often entice the borrowing of more money than can be afforded, at interest rates higher than normal.
• An examination by the Office of Fair Trading of the market for high cost credit, such as pay day loans and door step lending.

• Measures to help people in debt take control of their finances from the Money Advice Trust and a New Debtor’s Guide from the Insolvency Service.
• New powers for the courts to ban persistent rogue traders.
• The appointment of a Consumer Advocate whose role will be to  co-ordinate the work of existing agencies, to help educate consumers and help them get redress when involved in a scam.
• A credit card comparison website set up by the Financial Services Authority in 2010

Debtwizard says that with every plus there is a minus, new regulations could mean consumers facing higher bills. The credit market could shrink which means many consumers may find it even more difficult getting credit, this could lead to more individuals having to approach other forms of borrowing such as loan sharks or door step lending.