UK Competition Commission Says Store Cards Lack Competitive Pressures
The UK's Competition Commission has announced that it has provisionally concluded that the market for private label store cards and associated insurance isn't competitive. In a press release (PDF), the Commission said:
The Competition Commission (CC) has provisionally concluded that there is an adverse effect on competition in connection with the supply of consumer credit through store cards and associated insurance in the UK. It has estimated that in broad terms, store card APRs are on average some 10 to 20 per cent higher across the store card market as a whole than they would have been had they reflected providers’ costs, including the cost of capital. The detriment to cardholders in terms of the excess prices paid for credit and insurance is in the region of £80 million to £100 million a year.Full details on this inquiry are provided on the Competition Commission's web site.
