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| Store Cards shocker |
Consumer Correspondents
RIP-OFF store cards are being shamelessly mis-sold to hard-up customers, a shocking News of the World investigation today reveals.
Poorly trained shop assistants are flogging the cards without mentioning the sky-high interest rates in a desperate bid to get shoppers signed up before Christmas.
RIP-OFF store cards are being shamelessly mis-sold to hard-up customers, a shocking News of the World investigation today reveals.
Poorly trained shop assistants are flogging the cards without mentioning the sky-high interest rates in a desperate bid to get shoppers signed up before Christmas.
Customers can apply for a store card in a few minutes at the till.
Shoppers are issued with a temporary card, but have to pass a credit check before receiving a permanent store card in the post several days later.
Last week Gordon Brown slammed greedy credit card and store card companies for exploiting cash-strapped families, and today the true scale of the problem is laid bare.
Charlotte Broadbent, a 31-year-old PA from West London on £28,000 a year, took to the high street to find out how shops are selling their store cards.
In the ruthless quest for profits, shop assistants:
* PESTERED her to sign up immediately
* FAILED to tell her how much interest she would be paying
* ADMITTED they did not know what APR meant
* TOLD her the wrong information about the store card
Charlotte said: “I was totally shocked at how ruthless the shop assistants were - it was obvious they were just trying to get as many people signed up as possible.
“They didn’t mention the interest rates or charges, and the information was very unclear.
“The Government needs to clamp down on store cards being sold irresponsibly.
“It’s much harder to get credit now because of the credit crunch - but store cards seem to be the exception.”
The revelations come after Gordon Brown blasted credit card companies for hiking their rates and exploiting vulnerable families as the recession bites.
He called for a “new responsible approach” as the average APR on store cards hit an eye-watering 25 per cent.
A spokesperson for the PM added that Mr Brown was “very concerned” by the actions of some credit and store card companies, which was “hard to justify”.
The Competition Commission has also blasted store cards for making “excess profits”.
But today we reveal cash-strapped Brits are still being mis-sold expensive store cards that could plunge them into the red.
Charlotte went undercover in Oxford Street and the new Westfield shopping centre to expose the dirty world of store cards, and she found shoppers are not being given the information they need to make an informed decision.
One shop assistant from Argos admitted she didn’t even know what an interest rate WAS, before trying to sell Charlotte the card.
Charlotte was told the wrong information at House of Fraser, where an assistant said if she had a bad credit rating she would pay LESS interest.
In Topshop and New Look staff tried to get Charlotte to sign up without telling her what the APR was or how she would repay the cash.
And in all the stores staff insisted the cards were good deals - despite being a much more expensive way of borrowing money than the average credit card.
Sean Gardner, Director of MoneyExpert.com, warned: “Store cards have the potential to be a complete rip-off and it certainly doesn’t make sense to make an important financial decision at the behest of a pushy checkout salesperson.
“It's a simple decision - don't get one. Ever.
“Don't be sucked in by the money off or Christmas treats, instead, take advantage of some great deals on the credit card market or don't buy something you can't afford!"
In contrast, staff acted responsibly in Next and Selfridges.
Next refuse to give out store cards at the shop till, and instead ask customers to phone up Next Directory where they must go through a thorough credit check.
And at Selfridges customers have a private, sit down conversation with the Customer Services Department before opening a card.
The assistant did not try to flog the card, but clearly explained to Charlotte that the Selfridges Account worked like a credit card, and talked her through what a variable APR was.
The mis-selling of store cards is going on at a time when personal debt is rocketing by £1 every eight minutes, and 121 properties are being repossessed every day, according to debt charity Credit Action.
Last night the charity warned the average household will have racked up £10,000 of unsecured debt after Christmas.
Chris Tapp, Director of Credit Action, said: “It’s absolutely crucial that people are thinking carefully and setting budgets now to minimise the New Year money hangover.”
But the greedy store card sellers are not sparing a thought for their customers’ financial hangovers.
ARGOS
In Argos, Charlotte was flogged a store card by someone who admitted she had NO IDEA what the interest rate meant.
When asked if it was a good deal, she pointed to the 27.9 per cent APR, and said, laughing: “That’s it, but I don’t know what it means.”
She told us we could open up the card today and take advantage of “good deals”, but admitted “I don’t like credit.”
As soon as Charlotte left Argos, she was grabbed by a saleswoman aggressively flogging Argos Mastercards at 18.9 per cent APR variable.
The seller tried to get Charlotte to sign up BEFORE telling her what the APR was, but insisted it was a “good deal” particularly “now Christmas is coming.”
Charlotte said: “She was very aggressive - she literally grabbed my arm when I was leaving the store.
“And how can she be so sure getting the card is a good idea? She doesn’t even know me.”
A spokesperson for Argos said: “Argos always strives to provide the best customer service possible so we are disappointed to hear that on this particular occasion one of our members of staff was unable to provide satisfactory assistance. We will be contacting the store concerned to understand what happened in this individual case.
“We would like to make it clear that Argos does not take an overly proactive approach to promoting the Argos card in-store.
“All stores carry informative leaflets explaining exactly how the card account operates and clearly stating our APR.
“All our store colleagues are trained in how to offer these cards to customers and we have a dedicated support team who visit stores on a regular basis to ensure our products are being offered correctly.
“The Argos Mastercard is marketed in a small number of Argos stores by specialist, third-party agencies.
“All stands promoting the Argos Mastercard carry a large banner with the APR clearly and prominently indicated.”
NEW LOOK
The young, shy sales assistants at New Look were so desperate to flog the store card they handed Charlotte a contract and a pen before mentioning APR, payments, credit checks or variable interest rates.
Inexperienced shoppers could have thought they were just signing up to get 10 per cent off in store.
But the store card comes with a whopping 28.9 per cent variable APR, and gives shoppers up to £300 credit to spend instantly.
Amazingly, the young sellers insisted it was a good deal.
TOPSHOP
Staff at Topshop were so keen to give Charlotte a store card they whisked her to the front of the queue.
The store had run out of leaflets explaining the small print to the deal, but incredibly the assistant still tried to get her to sign up, saying, “I can tell you everything anyway”.
He told Charlotte about the discounts that came with the card - but he didn’t mention 19.9 per cent variable APR, paying back the money or how her credit history could affect the application.
Charlotte said: “I couldn’t believe they were prepared to give me a store card without explaining anything and without giving me a leaflet to read through.
“The shop assistant only wanted to tell me about the nice, glitzy things - like vouchers and discounts.
“Someone could have signed up with no idea they were getting a form of credit card.”
MOTHERCARE
Staff at Mothercare claimed their 19.9 per cent variable APR store card was a “great deal”, and said “you can do it now - all I need is a bank card.”
But the assistant failed to mention APRs or interest rates.
When Charlotte asked if it was expensive, she said, “Oh, no.”
And she only vaguely mentioned a credit check, saying “they’ll phone you back and tell you how much money you can get.”
Mothercare’s staff seemed to be working on commission, as our assistant begged us to come back and ask for her in particular if we wanted to open a store card.
Charlotte said: “It definitely seemed like she was on commission, she was so keen to sign me up to a store card.”
HOUSE OF FRASER
In House of Fraser, the young shop assistant told us the card was a “good deal” at a whopping 19.9 per cent variable interest rate.
The best credit card deal are around 15.9 per cent APR - a much cheaper way of borrowing.
And the confused assistant even told us if Charlotte had a bad credit rating she would get a lower APR.
She tried to tempt us into taking out the store card by saying “we’ve sold a lot”, and pointing out all the pretty Christmas dresses that have a 20 per cent reduction with the card.
Charlotte said: “Bless her, the girl didn’t have a clue what she was selling.
“But she really tempted me because she kept pointing out all the gorgeous dresses that I could get money off with the card.”
A spokesperson for House of Fraser said last night: “House of Fraser is fully committed to providing the highest standards of customer service in all of our stores.
“As part of that commitment every member of staff must undergo a comprehensive training programme before they are allowed to sell our cards.
“We take very seriously any report of a customer being mis-informed and since being contacted this afternoon we are currently looking into the incident.”
RIVER ISLAND
River Island are clearly pushing their store cards in the run up to Christmas.
They have already bumped up the rates since the credit crunch started - from 17.9 per cent in March to 19.9 per cent variable.
And one enthusiastic assistant told Charlotte to go straight to the till because “they’ll be really happy” if she applied for a store card.
But in the rush to get us to sign up, the shop assistant neglected to tell Charlotte the rate was variable.
And she seemed confused about why people got different limits on the cards, saying it was due to “your credit rating, I guess.”
Charlotte was told she could take out the store card straight away and buy something from the shop immediately.
Charlotte said: “She didn’t tell me the interest rate was variable, even though I asked her about it directly.”
DEBENHAMS
In Debenhams the shop assistant was in such a hurry to flog the card, she said: “We can do it for you now, you just need a debit card. You can get 10 per cent off everything.”
She insisted the 19.9 per cent variable rate was “a good deal”, although she seemed very unsure about the maximum interest rate, saying, “I think it’s twenty-something”.
Charlotte said: “I felt very pressured into getting a card, but I didn’t feel confident that I had enough information.”
Tim Moss, of moneysupermarket.com, warned: “Many high street stores prey on customers who do not understand the cards.
“Your average 18-year-old paying for shoes may not understand the implications of a high APR.”
The investigation comes after it was revealed many stores have hiked the rates on store cards before Christmas, despite the Bank of England slashing borrowing costs.
ENDS
SRCARD1
By Sophy Ridge
Consumer Correspondent
The average APR on a credit card is 17.6 per cent, according to moneyexpert.com.
But deals can be much lower, for instance Barclaycard Simplicity charges just 6.8 per cent APR.
Adam Williams, spokesperson for Which?, said: “You should never get a store card - you can get much better deals elsewhere.
“19.9 per cent APR isn’t too high for a store card, but it’s still a lot more than you could be paying on a credit card.”
Staff selling store cards are often on commission or under pressure to meet targets for the number of people signed up.
A spokesperson for New Look said: “The New Look Card charging structure and key benefits are clearly stated on all related materials in the prescribed regulatory manner.
“We also ensure that all new customers receive a welcome pack containing important card information including repayment methods.
“We check the knowledge of our staff through regular store compliance visits, working with our teams to constantly improve service.
“It is never our intention to mislead customers or to provide inaccurate information about any of our products or services.”
A spokesperson for Topshop said: “We're sorry you found your experience unsatisfactory.
“The APR is clearly visible and transparent on all our in-store sales literature and mailings.
“This, coupled with the fact that in order to receive a card all customers have to fill out and sign a credit agreement and undergo a credit check, makes it very unlikely for customers signing up for a card to be unaware that they are applying for credit.”
A spokesperson for Mothercare said: "At Mothercare, we take customer service very seriously.
“All our staff are fully trained in relation to the Mothercare card. “There is transparent printed information provided for customers, and full terms and conditions available, at till points within our stores.
“None of our store staff are paid commission in relation to any financial products we offer our customers."
A spokesperson for Debenhams said: "Customer service is paramount to Debenhams and all our staff undergo a full training programme before selling our cards.
“Our card offering is transparent with the APR's being clearly displayed on all point of sale material throughout our stores, and on all materials customers receive in the post.
“We also inform customers what benefits are available to them should they take out a Debenhams card in order to help them make an informed decision.
“If the customers changes their mind it is also very clear how they can cancel their card.”
Shoppers are issued with a temporary card, but have to pass a credit check before receiving a permanent store card in the post several days later.
Last week Gordon Brown slammed greedy credit card and store card companies for exploiting cash-strapped families, and today the true scale of the problem is laid bare.
Charlotte Broadbent, a 31-year-old PA from West London on £28,000 a year, took to the high street to find out how shops are selling their store cards.
In the ruthless quest for profits, shop assistants:
* PESTERED her to sign up immediately
* FAILED to tell her how much interest she would be paying
* ADMITTED they did not know what APR meant
* TOLD her the wrong information about the store card
Charlotte said: “I was totally shocked at how ruthless the shop assistants were - it was obvious they were just trying to get as many people signed up as possible.
“They didn’t mention the interest rates or charges, and the information was very unclear.
“The Government needs to clamp down on store cards being sold irresponsibly.
“It’s much harder to get credit now because of the credit crunch - but store cards seem to be the exception.”
The revelations come after Gordon Brown blasted credit card companies for hiking their rates and exploiting vulnerable families as the recession bites.
He called for a “new responsible approach” as the average APR on store cards hit an eye-watering 25 per cent.
A spokesperson for the PM added that Mr Brown was “very concerned” by the actions of some credit and store card companies, which was “hard to justify”.
The Competition Commission has also blasted store cards for making “excess profits”.
But today we reveal cash-strapped Brits are still being mis-sold expensive store cards that could plunge them into the red.
Charlotte went undercover in Oxford Street and the new Westfield shopping centre to expose the dirty world of store cards, and she found shoppers are not being given the information they need to make an informed decision.
One shop assistant from Argos admitted she didn’t even know what an interest rate WAS, before trying to sell Charlotte the card.
Charlotte was told the wrong information at House of Fraser, where an assistant said if she had a bad credit rating she would pay LESS interest.
In Topshop and New Look staff tried to get Charlotte to sign up without telling her what the APR was or how she would repay the cash.
And in all the stores staff insisted the cards were good deals - despite being a much more expensive way of borrowing money than the average credit card.
Sean Gardner, Director of MoneyExpert.com, warned: “Store cards have the potential to be a complete rip-off and it certainly doesn’t make sense to make an important financial decision at the behest of a pushy checkout salesperson.
“It's a simple decision - don't get one. Ever.
“Don't be sucked in by the money off or Christmas treats, instead, take advantage of some great deals on the credit card market or don't buy something you can't afford!"
In contrast, staff acted responsibly in Next and Selfridges.
Next refuse to give out store cards at the shop till, and instead ask customers to phone up Next Directory where they must go through a thorough credit check.
And at Selfridges customers have a private, sit down conversation with the Customer Services Department before opening a card.
The assistant did not try to flog the card, but clearly explained to Charlotte that the Selfridges Account worked like a credit card, and talked her through what a variable APR was.
The mis-selling of store cards is going on at a time when personal debt is rocketing by £1 every eight minutes, and 121 properties are being repossessed every day, according to debt charity Credit Action.
Last night the charity warned the average household will have racked up £10,000 of unsecured debt after Christmas.
Chris Tapp, Director of Credit Action, said: “It’s absolutely crucial that people are thinking carefully and setting budgets now to minimise the New Year money hangover.”
But the greedy store card sellers are not sparing a thought for their customers’ financial hangovers.
ARGOS
In Argos, Charlotte was flogged a store card by someone who admitted she had NO IDEA what the interest rate meant.
When asked if it was a good deal, she pointed to the 27.9 per cent APR, and said, laughing: “That’s it, but I don’t know what it means.”
She told us we could open up the card today and take advantage of “good deals”, but admitted “I don’t like credit.”
As soon as Charlotte left Argos, she was grabbed by a saleswoman aggressively flogging Argos Mastercards at 18.9 per cent APR variable.
The seller tried to get Charlotte to sign up BEFORE telling her what the APR was, but insisted it was a “good deal” particularly “now Christmas is coming.”
Charlotte said: “She was very aggressive - she literally grabbed my arm when I was leaving the store.
“And how can she be so sure getting the card is a good idea? She doesn’t even know me.”
A spokesperson for Argos said: “Argos always strives to provide the best customer service possible so we are disappointed to hear that on this particular occasion one of our members of staff was unable to provide satisfactory assistance. We will be contacting the store concerned to understand what happened in this individual case.
“We would like to make it clear that Argos does not take an overly proactive approach to promoting the Argos card in-store.
“All stores carry informative leaflets explaining exactly how the card account operates and clearly stating our APR.
“All our store colleagues are trained in how to offer these cards to customers and we have a dedicated support team who visit stores on a regular basis to ensure our products are being offered correctly.
“The Argos Mastercard is marketed in a small number of Argos stores by specialist, third-party agencies.
“All stands promoting the Argos Mastercard carry a large banner with the APR clearly and prominently indicated.”
NEW LOOK
The young, shy sales assistants at New Look were so desperate to flog the store card they handed Charlotte a contract and a pen before mentioning APR, payments, credit checks or variable interest rates.
Inexperienced shoppers could have thought they were just signing up to get 10 per cent off in store.
But the store card comes with a whopping 28.9 per cent variable APR, and gives shoppers up to £300 credit to spend instantly.
Amazingly, the young sellers insisted it was a good deal.
TOPSHOP
Staff at Topshop were so keen to give Charlotte a store card they whisked her to the front of the queue.
The store had run out of leaflets explaining the small print to the deal, but incredibly the assistant still tried to get her to sign up, saying, “I can tell you everything anyway”.
He told Charlotte about the discounts that came with the card - but he didn’t mention 19.9 per cent variable APR, paying back the money or how her credit history could affect the application.
Charlotte said: “I couldn’t believe they were prepared to give me a store card without explaining anything and without giving me a leaflet to read through.
“The shop assistant only wanted to tell me about the nice, glitzy things - like vouchers and discounts.
“Someone could have signed up with no idea they were getting a form of credit card.”
MOTHERCARE
Staff at Mothercare claimed their 19.9 per cent variable APR store card was a “great deal”, and said “you can do it now - all I need is a bank card.”
But the assistant failed to mention APRs or interest rates.
When Charlotte asked if it was expensive, she said, “Oh, no.”
And she only vaguely mentioned a credit check, saying “they’ll phone you back and tell you how much money you can get.”
Mothercare’s staff seemed to be working on commission, as our assistant begged us to come back and ask for her in particular if we wanted to open a store card.
Charlotte said: “It definitely seemed like she was on commission, she was so keen to sign me up to a store card.”
HOUSE OF FRASER
In House of Fraser, the young shop assistant told us the card was a “good deal” at a whopping 19.9 per cent variable interest rate.
The best credit card deal are around 15.9 per cent APR - a much cheaper way of borrowing.
And the confused assistant even told us if Charlotte had a bad credit rating she would get a lower APR.
She tried to tempt us into taking out the store card by saying “we’ve sold a lot”, and pointing out all the pretty Christmas dresses that have a 20 per cent reduction with the card.
Charlotte said: “Bless her, the girl didn’t have a clue what she was selling.
“But she really tempted me because she kept pointing out all the gorgeous dresses that I could get money off with the card.”
A spokesperson for House of Fraser said last night: “House of Fraser is fully committed to providing the highest standards of customer service in all of our stores.
“As part of that commitment every member of staff must undergo a comprehensive training programme before they are allowed to sell our cards.
“We take very seriously any report of a customer being mis-informed and since being contacted this afternoon we are currently looking into the incident.”
RIVER ISLAND
River Island are clearly pushing their store cards in the run up to Christmas.
They have already bumped up the rates since the credit crunch started - from 17.9 per cent in March to 19.9 per cent variable.
And one enthusiastic assistant told Charlotte to go straight to the till because “they’ll be really happy” if she applied for a store card.
But in the rush to get us to sign up, the shop assistant neglected to tell Charlotte the rate was variable.
And she seemed confused about why people got different limits on the cards, saying it was due to “your credit rating, I guess.”
Charlotte was told she could take out the store card straight away and buy something from the shop immediately.
Charlotte said: “She didn’t tell me the interest rate was variable, even though I asked her about it directly.”
DEBENHAMS
In Debenhams the shop assistant was in such a hurry to flog the card, she said: “We can do it for you now, you just need a debit card. You can get 10 per cent off everything.”
She insisted the 19.9 per cent variable rate was “a good deal”, although she seemed very unsure about the maximum interest rate, saying, “I think it’s twenty-something”.
Charlotte said: “I felt very pressured into getting a card, but I didn’t feel confident that I had enough information.”
Tim Moss, of moneysupermarket.com, warned: “Many high street stores prey on customers who do not understand the cards.
“Your average 18-year-old paying for shoes may not understand the implications of a high APR.”
The investigation comes after it was revealed many stores have hiked the rates on store cards before Christmas, despite the Bank of England slashing borrowing costs.
ENDS
SRCARD1
By Sophy Ridge
Consumer Correspondent
The average APR on a credit card is 17.6 per cent, according to moneyexpert.com.
But deals can be much lower, for instance Barclaycard Simplicity charges just 6.8 per cent APR.
Adam Williams, spokesperson for Which?, said: “You should never get a store card - you can get much better deals elsewhere.
“19.9 per cent APR isn’t too high for a store card, but it’s still a lot more than you could be paying on a credit card.”
Staff selling store cards are often on commission or under pressure to meet targets for the number of people signed up.
A spokesperson for New Look said: “The New Look Card charging structure and key benefits are clearly stated on all related materials in the prescribed regulatory manner.
“We also ensure that all new customers receive a welcome pack containing important card information including repayment methods.
“We check the knowledge of our staff through regular store compliance visits, working with our teams to constantly improve service.
“It is never our intention to mislead customers or to provide inaccurate information about any of our products or services.”
A spokesperson for Topshop said: “We're sorry you found your experience unsatisfactory.
“The APR is clearly visible and transparent on all our in-store sales literature and mailings.
“This, coupled with the fact that in order to receive a card all customers have to fill out and sign a credit agreement and undergo a credit check, makes it very unlikely for customers signing up for a card to be unaware that they are applying for credit.”
A spokesperson for Mothercare said: "At Mothercare, we take customer service very seriously.
“All our staff are fully trained in relation to the Mothercare card. “There is transparent printed information provided for customers, and full terms and conditions available, at till points within our stores.
“None of our store staff are paid commission in relation to any financial products we offer our customers."
A spokesperson for Debenhams said: "Customer service is paramount to Debenhams and all our staff undergo a full training programme before selling our cards.
“Our card offering is transparent with the APR's being clearly displayed on all point of sale material throughout our stores, and on all materials customers receive in the post.
“We also inform customers what benefits are available to them should they take out a Debenhams card in order to help them make an informed decision.
“If the customers changes their mind it is also very clear how they can cancel their card.”
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