The Government moved a step closer to fulfilling its coalition commitment to end unfair bank charges today.

It has launched a consultation on steps that can be taken to ensure consumers get a better deal when they borrow money (see the Best bank Accounts and Top Credit Cards guide).

As well as tackling bank charges, it also plans to introduce a seven-day cooling off period for people taking out store cards, and give the regulator the power to cap interest rates on credit and store cards.

It is also considering making credit card providers produce electronic statements to help people assess whether a different provider would offer them better value.

The review will also look at ways to improve the help available to borrowers who get into financial difficulties.

Consumer minister Edward Davey says: "Well-informed, empowered consumers are central to our vision for how a credit market between customers and lenders should work.

"I want to encourage both to take responsible decisions and to strengthen protection where necessary – particularly for the most vulnerable.

"If things go wrong people face a confusing array of debt remedies, so I also want to examine how the existing insolvency regime can be made to work better."

Financial Secretary to the Treasury Mark Hoban says: "This Government is committed to curbing unsustainable lending and helping individuals manage their finances better.

"I believe that improved competition will deliver a better deal for everyone, and that financially capable consumers are best placed to drive competition."

The Government is calling for evidence on the issue and hopes to publish its proposals next year.

Further reading/Key links

Top deals: Best bank Accounts, Top Credit Cards
Get cash back: Bank Charges, Financial Fight Back
Other issue-specific reclaim guides: PPI Reclaiming, Credit Card Charges, Direct Debits, Setting Off, Mortgage Arrears, Endowment Mis-selling

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