Store cards
Date of reference: 18 March 2004
Action before reference
OFT carried out an informal, fact-finding review of store cards.
Reason for reference
The OFT has referred the following services to the Competition Commission (CC):
(a) store card credit services to retailers and related services
(b) consumer credit through store cards.
The OFT has referred these services to the Commission because of:
- transparency concerns on the pre- and post-contract side which will not necessarily be covered by the Consumer Credit White Paper
- concerns as to whether the market for the supply of store card credit services to retailers is working well given that entry and expansion is difficult because of incumbency advantages (length of agreements and exclusivity clauses), switching costs and sunk investment costs
- in relation to the supply of consumer credit through store cards, the inability of consumers to assess the costs and benefits of store card use, including whether the level of APRs would be lower if that assessment were easier.
Key documents
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Market investigation references