Are department stores and large retail chains contributing to the UK’s debt crisis?

Based on recent findings, conducted by a respected price comparison site, one of the UK’s leading home department stores has been accused of issuing credit cards to customers, who have not requested them.

Government officials are calling for a change in the consumer credit act, in order to prohibit companies from issuing unsolicited credit. As it currently stands, it is perfectly legal for companies to issue credit in the form of cards to known customers, even if they have not directly applied. Officials believe that freely offering credit in this way encourages consumers to spend inappropriately, which in turn fuels further debt. At a time when consumer debt is reaching uncontrollable levels, many deem such acts as being irresponsible.

Currently the large majority of store and loyalty cards are issued through one primary lender, who is responsible for mailing the cards to customers on behalf of their retail chain partners. A Lib Dem spokesman has branded the lender as irresponsible and has reiterated there still pending call for a change in the law, made back in 05 to protect consumers from such practices.
 
Since the call for reform, many more consumers have received credit cards that they neither ordered nor wanted. Consumer’s request card’s for specific purposes and it is wrong for them to be issued in this way. The biggest concern among officials and consumer groups are the rates of interest tagged to such cards, which are typically very high. If consumers do decide to use them as alternatives for spending, they are more likely to run up serious debt.