OFT carried out an informal, fact-finding review of store cards.
Reason for reference
Date of reference: 18 March 2004
The OFT has referred the following services to the Competition
(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.