APRIL 2004

New Credit Card Disclosures in the UK

New studies from the United Kingdom’s Office of Fair Trading (OFT, the British equivalent of the U.S. Federal Trade Commission) have recommended that the British government require credit card issuers to adopt the "Schumer box" approach to disclosure of card pricing and terms. The "Schumer box" refers to the U.S. requirement under the Truth in Lending Act that card issuers display a summary box prominently on the monthly statement that discloses items such as the annual percentage rate, additional charges, minimum payment due, and credit limit. Kate Wilcox, a spokesperson for the OFT, told the American Banker that "the parallels (with the U.S.) are absolute. The thinking behind the summary box is explicitly based on U.S. experience."

For its part, the credit card industry has tried to get in front of the regulatory process. Paul Rodford, a spokesperson for the Association for Payment Clearing Services, a British trade group, told the American Banker that all of its card-issuing members, who account for 90% of all credit cards in the U.K., will be using the summary box by the end of March 2004. Rodford added that regulation from Parliament may come, but it will likely be redundant at this point.