Credit Card Cheques Branded A "Rip-Off" By Financial Protection Agencies.

Summary: The Office of Fair Trading has issued a demand for a change in the law restricting the use of credit card cheques. These cheques have been around for about 10 years and are designed to allow people to transfer funds into another of the cardholder's accounts or make payments using their credit card accounts without the use of the card itself. They have however come under fire for a variety of reasons and are widely disliked by both financial watchdogs and the public alike.

The Office of Fair Trading has issued a demand for a change in the law restricting the use of credit card cheques. These cheques have been around for about 10 years and are designed to allow people to transfer funds into another of the cardholder's accounts or make payments using their credit card accounts without the use of the card itself. They have however come under fire for a variety of reasons and are widely disliked by both financial watchdogs and the public alike. Last year, Richard Brown the chief executive of credit card comparison site Moneynet, warned, "We have always advised consumers to avoid credit card cheques like the plague. Many people have no idea that these cheques carry extra charges and do not work like the credit card in their wallet. It's unethical and irresponsible." Which? has welcomed the comments from the OFT which called credit card cheques a rip-off. Which? is particularly critical of the widespread industry practice of sending out unsolicited credit card cheques in the post whether they are wanted by cardholders or not. Mike Naylor of Which? said, "We want unsolicited credit card cheques to be banned, especially as we have found that companies use them to encourage indebtedness, for example cheques have been sent out with marketing literature suggesting they can be used to pay for holidays or gifts." Richard Brown stated, "Many people will be feeling the pinch as all the bills start to roll in, and will be tempted to use these cheques - but they could find it an expensive option," he also added, "At four times the base rate, consumers may want to think twice before using these cheques. And don't forget, users also forfeit the benefit of the lengthy interest free periods available on standard credit card spending." Financial information site - Motley Fool, pointed out that, "You also don't get the same degree of protection as you do when you use the actual credit card where card providers are equally liable for a breach of contract by the supplier in respect of items worth between