The FSA, the Office of Fair Trading (OFT) and the Financial Ombudsman Service (FOS) have updated a case study on the wider implications website covering risk-based step-charges in interest rates on credit cards and store cards.

The FOS has raised issues associated with a series of credit card and store card cases, where: consumers complained about a step change in the interest rate charged which had been applied to pre-existing debt; and the card providers said that the interest rate has been increased in order to reflect a reassessment of the risk presented by the consumers concerned.

The FOS reports that the card providers concerned settled the cases in favour of the consumers. Most of the card providers settled early, when the FOS requested their evidence. A few settled later, when the FOS expressed provisional views on whether the evidence established that the changes were truly a result of a reassessment of customer risk.

The FOS has written to the OFT to explain that the cases received were being satisfactorily resolved. In light of this and the introduction of the principles agreed at the credit card summit, the OFT has no immediate plans to take enforcement or other regulatory action in this area.

View Risk-based step-charges in interest rates on credit cards and store cards, 10 February 2010