Credit card shuffling practice in question
By UK CreditCards.com
Credit card shuffling could be outlawed under proposals to be put forward by Labour MP Andrew MacKinlay in parliament next week.
The process involves debt recovery agents requesting that customers who owe money pay off debts using a credit card -- but not one from the organisation involved.
In this way, debt can be transferred to other businesses -- often at the cost of higher interest rates for the consumer.
Mr MacKinlay told the Sunday Times that he would mention an investigation by the newspaper -- which alleged that the process was taking place at the Lloyds Banking Group -- when he discussed debt collection in the House of Commons.
"The current rules on the collection of debt are inadequate and need to be reviewed because they are not being enforced properly," he told the newspaper.
"There need to be severe financial penalties if companies are found to be harassing customers and treating them badly."
The Lloyds Banking Group -- which is part-owned by the taxpayer -- was created following the takeover of HBOS by Lloyds TSB.
Published: 20 April 2009
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