Store cards ‘lure the vulnerable’, warns insolvency body

FINANCIALLY unqualified shop staff should be banned from selling store credit cards, according to insolvency trade body R3.

Yorkshire insolvency experts warn that this practice contributes to the mountain of personal debt in the UK and entices vulnerable customers into debt.

Andy Wood, Yorkshire regional chair of R3 and partner in The P&A Partnership, said: “It is frankly irresponsible to sell credit over the shop counter as though it is no more important than buying a sandwich.

“Without proper training, shop assistants are inappropriately qualified to understand the consequences of what they are selling and often commission driven.”

Mr Wood added that while store cards can be presented as innocuous they can lure vulnerable people into debt.

“They should only be sold by people who have been sufficiently trained to sell financial products,” he added.

A recent national poll finds that the majority (72%) of insolvency practitioners believe it is too easy to get a credit card and two thirds (66%) have seen cases where people have signed up for store credit cards without any understanding of ‘what they had let themselves in for’.

Case studies show individuals with unsecured debt of £300,000 and others with more than 30 credit cards at one time.

R3’s warning follows the closure of the Government’s credit card consultation.

“We broadly support the consultation which is considering raising monthly minimum repayment rates,” said Mr Wood.

“This measure would encourage people to see store credit cards as short term credit rather than ‘a long term way of life.”