Unsolicited credit card cheques
In September 2009 we published a draft clause banning unsolicited credit card cheques, and a draft impact assessment. The clause will insert new sections 51A and 51B into the Consumer Credit Act 1974 to give effect to the prohibition.
A number of changes have been made to the clause as a result of comments received from stakeholders:
• the restrictions on sending unsolicited credit card cheques have been applied at the level of the credit agreement rather than the customer, so that credit card issuers will not have to cross-check customer requests to ensure that customers with more than one card have not requested cheques on all cards at the same time (sections 51A(5) and (6)(b))
• section 51A(4) introduces a limit of three cheques per request so the credit card issuer cannot send the customer more than three cheques in response to a request
• section 51A(8) makes it clear that "credit card cheque" does not include a cheque to be used only in connection with a current account
• section 51B exempts credit card cheques used for the purposes of business from the prohibition
• the sanction for breach of the prohibition is a fine rather than a fine or a jail term, and the Regulatory Enforcement and Sanctions Act has been applied to provide for the possibility of civil penalties (this Act applies to the rest of the Consumer Credit Act)
The clause is included in the Financial Services Bill which was announced in the Queen’s Speech and introduced on 19 November.
Consumer Credit Act 1974: clause on unsolicited credit card cheques
Impact assessment of credit card cheques
