Credit card companies 'treat customers fairly'

28 July 2010 12:21:58

Credit card users are happy with their treatment from providers.

Although the UK credit card industry is currently in a state of flux, with a raft of new regulations in the pipeline, a study has suggested that most Britons are happy with the service they receive from their provider.

Regulatory changes

Following a consultation launched by the Department for Business, Innovation and Skills, five new consumer rights will be introduced in the UK credit card industry at the start of 2011. This will add to the Treating Customers Fairly (TCF) principle, which was created in 2006 by the Financial Services Authority to improve outcomes for retail customers. One could argue that the implication of these moves is that companies should be doing more to protect their customers' interests. However, Auriemma Consulting Group (ACG) has reached a different conclusion after conducting its quarterly 'Cardbeat' study.

Credit card users 'happy with providers'

The company polled 508 UK credit card users for their observations about their relationship with their provider. An overwhelming majority (94%) said that they are being treated fairly at present, with 84% claiming that this perception has not changed over the past 12 months. Furthermore, the research revealed that 82% believe their credit card company values them as a customer.

"Over the past year, the payments industry has introduced proactive tactics and strategies to convey the message of TCF to the consumer," commented Megan Bramlette, a managing associate at ACG. "These findings imply that consumers felt that they were being treated fairly prior to the introduction of the regulations and consumer rights, and that these strategies really only succeeded at reinforcing an existing sentiment."

Access to credit and fair treatment 'not linked'

The findings of the study were not entirely clear-cut, with 81% of respondents revealing that they only think about their credit card company when something goes wrong with their account or they are unhappy with customer service. In other words, consumers view their credit cards as a "commodity" and will only give them special attention in difficult times. It is also interesting to consider the findings of the research in relation to the fact that credit card companies have been tightening their lending criteria in response to the global economic downturn.

"It is clear that most credit card users do not equate access to credit with being treated fairly," noted Ms Bramlette. "We can conclude that the credit card issuers' actions to rein in commercial exposure did not result in any lost equity from consumers."

Prudence to remain a key concern

ACG emphasised that regulation will continue to affect the British payments industry, with "significant costs" attached to any new rules. However, the overriding feeling to emerge from the 'Cardbeat' study is that Britons will continue to view their providers and use their credit cards in the same way. But with the economic landscape showing no tangible signs of improving in the near future, the onus will remain on consumers to compare credit cards in order to find the deal which best suits their individual circumstances.

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