Government unveils 'consumer power' plans

The Government has announced new measures to tackle debt and enhance consumer powers.

The plans are set out in a Consumer White Paper, introduced by Business Secretary Lord Mandelson as a way to help the public "make better informed borrowing decisions".

Under proposed new rules, credit card companies could be banned from increasing borrowers' credit limits without their prior consent, and restrictions placed on the ability to raise interest rates on existing debts.

The Government also plans to appoint a new 'Consumer Advocate' to educate shoppers and improve refunding processes. It will also give the courts more powers to ban persistent rogue traders and create a specialist team to look at regulation of internet trading.

Consumer Minister Kevin Brennan said that the Government was taking "decisive action now to prepare for the future".

However, British Retail Consortium director-general Stephen Robertson warned that the creation of a Consumer Advocate should be more than "just a gesture" and would "only be worthwhile if it actually improves customer education and advice".

"The Government should make the role independent of campaigning bodies such as Consumer Focus, particularly if the Advocate is given the power to bring collective legal cases."

"And there must now be a rationalisation of the current confusing range of customer education bodies," he added.