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FOI HMTreasury - CAT Standards 2001 - Dec 09

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  • FOI HMTreasury - CAT Standards 2001 - Dec 09

    To: janet.robbins@hm-treasury.gov.uk; public.enquiries@hm-treasury.gov.uk Bcc:

    30th December 2009

    Dear Ms Robbins

    Please can you let me have copies of responses to the consultation on CAT standards for credit cards and basic accounts and also details of the implementation, or not, of the CAT standards, as outlined in the document H M TREASURY STANDARDS FOR RETAIL FINANCIAL PRODUCTS. If there is a formal summary of responses produced by the Treasury then I should like to obtain a copy of this too.

    I would also like a list of all companies who met the criteria for the CAT standard on credit cards, also a list of all companies who met the criteria for the CAT standard on Basic Bank accounts, IF any were implemented. I should also like a copy of any Regulatory Impact Assessment report produced in response to the consultation and proposed standards.

    There appears to be very little information on the Treasury website since the intial draft CAT standards consultation.

    I appreciate your help.

    Kind regards


    Draft CAT standard for credit cards

    The passages in square brackets are proposals or options on which the consultation specifically seeks comment.

    • All statements must give the following information clearly:
    • the annual percentage rate (APR)
    • the APR expressed as base rate plus margin
    • on what amount of debt interest is charged when the customer pays only part of the outstanding amount
    • from what date interest is applied
    • all other charges
    • No more than one interest rate for cash advances and one interest rate for purchases (the two rates may be the same)
    • [The card interest rates must be within [x] percentage points of the base rate] or
    • [The interest rates must track any downward movement in the base rate within [28] days of the base rate change or the cardholder must be sent a letter within [28] days of the base rate change setting out the change in the margin].
    • No membership fee
    • Payments must be applied to the outstanding debt in the following order:
    • interest and handling charges;
    • cash advances;
    • purchases on previous statements, including balance transfers;
    • new purchases on the current statement;
    • cash advances made, but not yet on the statement;
    • purchases made but not yet on the statement.


    • No minimum spending limit
    • No requirement to buy linked products (eg repayment protection)
    • Credit available on the provider's normal terms


    • Information to be in language which is fair, clear, and not misleading
    • Deadline for minimum payment to be at least [25] days from statement date, and no interest charged on new items if the balance is paid in full in this period
    • The minimum payment required each month to be no more than [5] or [5]% of the excess amount (whichever is larger)


    • for late or incomplete payment to be no more than the minimum balance or [20] (whichever is larger)
    • for exceeding the credit limit to be no more than [5]
    • customers to be informed of the penalty fees at the outset
    • Customers can set their credit limits lower than the provider's choice and customers must be informed of this at the outset and whenever the provider proposes to change the credit limit
    • Customer is free to pay any amount above the minimum payment of the outstanding balance each month
    • Customer must be able to set up direct debit instructions:

    either to make the minimum payment each month
    or to clear the entire balance each month
    Customers can select their statement date at no cost at the start of the agreement, and can change the statement date at any time, at a charge of no more than [10] for each change
    [6] months notice of change from CAT standard terms
    [30] days notice of varying of other terms, if they adversely affect the customer
    The customer may end the agreement at any time, providing all payments have been met
    • If the card is lost or stolen, once the holder informs the provider, the holder will be responsible for no more than [xx] of losses which result from someone else using the card. If the card is used fraudulently without the cardholder's knowledge the holder will be responsible for no more than [xx] of losses which result from someone else using the card
    • The user must be told clearly how exchange rates on purchases and advances in foreign currencies are calculated
    • For cash advances, the handling charge to be no more than 1.5%

    Draft CAT standard for basic bank accounts


    • No one-off or regular charges for everyday transactions.
    • No risk of an overdraft.


    • No requirement for initial or regular deposits. (Undischarged bankrupts and under sixteen's may be turned down.)
    • Account holders must be able to use the following:
    • cash machines;
    • cash and cheque deposits;
    • automated credit transfer;
    • direct debit, standing order, or budget accounts.


    • All advertising and paperwork must be straightforward, fair and clear.
    • Account holders must be given regular statements, and at least six months notice if the bank can no longer offer a BBA on CAT standard terms.
    • Ability to withdraw all funds (see para 9 of notes).
    Last edited by Amethyst; 9th February 2010, 11:57:AM.

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  • #2
    Re: FOI HMTreasury - CAT Standards 2001 - Dec 09

    Dear Ms ,

    Thank you for your Freedom of Information request. I write to confirm receipt of your request and to let you know that it is receiving attention. If you have any enquiries regarding your request do not hesitate to contact us.

    Darren Creamer
    Correspondence and Enquiry Unit

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

    Received a Court Claim? Read >>>>> First Steps


    • #3
      Re: FOI HMTreasury - CAT Standards 2001 - Dec 09

      Response - they can;t find it ? how can they not find it ? Response to FOI request - HM Treasury

      Original documents for consultation - > http://www.hm-treasury.gov.uk/d/2(12).pdf frm Standards for Retail Financial Services - HM Treasury

      and hansard of FEB 2002

      Universal Bank

      Dr. Cable: To ask the Secretary of State for Trade and Industry what agreement has been reached with commercial banks on the charges to be levied on failed direct debits on basic bank accounts under the Universal bank. [32554]

      Mr. Alexander [holding answer 1 February 2002]: The banks have agreed to make their basic bank accounts accessible through post offices as part of universal banking services. Implementation of that agreement is now a commercial matter between Post Office Ltd. and the banks. The detailed features of these accounts are not part of the agreement on universal banking services. However, the Government have announced their intention to establish a benchmark CAT standard—covering charges, access and terms—for a basic bank account, and are still in discussion with the banks about these.
      October 02

      Mr. Robathan: To ask the Secretary of State for Trade and Industry what assessment she has made as to whether the Post Office card account will pass the Government's proposed CAT standard. [76339]

      Mr. Timms: The Government have no plans to produce a CAT standard for the Post Office card account. The card account is the only account of its type, quite distinct from current accounts and basic bank accounts. It is a very simple account for benefit, pension and tax credit recipients. Its functionality is limited to the crediting by Government agencies of benefits, pensions and tax credits, and the withdrawal by the customer of those monies at post offices.

      November 2002 - http://www.parliament.the-stationery...t/21105h01.htm

      LLOYDS - treasury committee TUESDAY 14 MAY 2002
      12.2 Lloyds TSB responded to the Treasury Consultation document, Standards for Retail Financial Products, issued in January 2001. Through the British Bankers' Association (BBA), Lloyds TSB has also been in discussion with the Treasury about the proposed CAT standard for a basic bank account and look forward to receiving further details when available.
      Point being it wasnt a random idea put forward and shelved immediately it underwent select committee discussion and had a consultation by the treasury, so how can the treasury not have the documents I asked for ? Lloyds responded to it !
      as did LACORS - LACORS - Subject Content Details

      also International Budget Project - Search standards oddly was removed on 6th Jan lol thus being cached copy

      also http://www.hm-treasury.gov.uk/d/refo...kets080709.pdf ( July 09 )

      8.23 The Government has twice introduced measures intended to improve access to basic
      financial products. In 1998 it introduced CAT (Charges, Access, Terms) standards and in 2005,
      following the Sandler report5, these were replaced with ‘stakeholder’ products, a suite of simple
      products with defined characteristics.
      8.24 Both stakeholder and CAT standards imposed requirements on charges, accessibility and
      terms. However, neither were popular with the financial services industry, which argued that
      charge caps made the products unprofitable and consumers did not demand them.
      This is
      backed up by sales data for products in markets with a high degree of choice – according to
      Association of British Insurers (ABI) data, less than a quarter of Individual Savings Accounts (ISA)
      sold in 2007 by ABI members were stakeholder ISAs. Similarly, stakeholder pensions have greatly
      improved the functioning of the personal pensions market, but have not by themselves resolved
      all the issues facing pensions.
      8.25 It seems clear that while stakeholder and CAT standard initiatives were partially successful,
      there is further to go. The ideal system would allow freedom over product design, while guiding
      those people who would be best served by basic, cheap and accessible products in the right
      direction. Wherever people do choose other, more complex options, the system should make
      sure that they do so knowing about cheaper and simpler alternatives. The Government
      welcomes views on how best to achieve this, including for products which serve the most basic
      and widespread consumer needs – such as current or saving accounts.

      Last edited by Amethyst; 5th February 2010, 20:44:PM.

      Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

      Received a Court Claim? Read >>>>> First Steps


      • #4
        Re: FOI HMTreasury - CAT Standards 2001 - Dec 09


        Dear Lisa

        Thank you for sending the reply on.

        It seems a little odd that no information relating to the consultation on CAT standards for credit cards or basic accounts can be located. The basic information is on this link on HM treasury website - CAT standards for credit cards - HM Treasury
        and responses to the consultation paper were due by April 2001 .

        Do the Treasury only hold documents on consultations for a certain period ?

        Would any other government department be likely to have the documents relating to the CAT standards consultation ?

        Many thanks for your continued assistance

        Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

        Received a Court Claim? Read >>>>> First Steps


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