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Financial Services Act 2010

Measures to protect consumers

Section 15: Restrictions on provision of credit card cheques

183.This section inserts new sections 51A and 51B into the Consumer Credit Act 1974. New section 51A makes it an offence for a credit card issuer to send credit card cheques to a customer other than in response to a request from that customer.

184.The request may be entirely at the instigation of the customer or the credit card issuer may offer to send cheques (for example via a mail shot). However, the customer cannot be considered to have requested cheques simply because he has not said he does not want them. The credit card issuer may not send more than three cheques to a customer in response to a request (but must send fewer than three if requested). The customer cannot make an ongoing request, for example, he cannot ask for one cheque per month for the next year or indefinitely. The restrictions on meeting requests apply at the level of the agreement rather than the customer, so the customer can request and be sent cheques on more than one card at the same time.

185.Credit card cheques are provided by many credit card issuers to those to whom they have issued credit cards. They are very similar in appearance to ordinary bank current account cheques and can be used in any situation where a current account cheque can be used (but they are not guaranteed by the credit card as a current account cheque is guaranteed by a cheque guarantee card). Once used, the cheque appears on the credit card statement in the same way as an item purchased with the card or a cash withdrawal on the card. In the new section 51A, credit card cheques are defined by reference to the provision of credit under a credit-token agreement. A credit-token agreement is defined in section 14 of the Consumer Credit Act 1974 as a regulated agreement to provide credit in connection with the use of a credit-token. Credit-tokens include credit cards.

186.New section 51B provides that new section 51A does not apply to credit card cheques issued to business customers.

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