M&S backtracks over &More credit card after OFT probe

Marks and Spencer Financial Services (MSFS) has changed the way it will offer to replace its store cards by the &More credit card after action by the Office of Fair Trading.

MSFS had sent out letters to many card holders saying that its store card would automatically be replaced by the &More credit card unless card holders objected. Under section 51 of the Consumer Credit Act 1974, it is "an offence" to send a credit token to a consumer unless it has been requested in writing, the OFT said.

MSFS considered that it was not contravening the law because it was not supplying a new credit token but sending a replacement card as a result of a variation to the existing store card agreement. The OFT view was that MSFS did not have the right to change one type of card into another in this way.

MSFS has agreed to make changes to its plans, and all store card holders being sent the new &More card will now be told that, if they wish to keep their store card, they need take no action.

In addition, the OFT has challenged a standard term in the MSFS store card agreement that purports to give MSFS an "unrestricted unilateral right" to change the terms of the agreement. The OFT considers that this term was legally unfair and M&S has, without accepting the OFT's view, given the OFT an undertaking that it will amend the challenged term to limit its applicability.

John Vickers, OFT Chairman, said: "Inertia selling of credit can have damaging consequences for consumers. In this case Marks and Spencer Financial Services has agreed to take practical steps so that consumers will move from store card to credit card only if they positively make that choice."


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