Bank reforms could hit credit card firms

By UK CreditCards.com

Major changes affecting UK credit card providers have been recommended by the governor of the Bank of England.

Mervyn King said that the current regulatory system, which allows large financial firms to maintain both retail banking and investment banking units, could be seen as "impractical."

If adopted, the reforms would see low-risk financial operations, such as high street banks providing savings and current accounts and credit cards, run as separate entities to investment banks trading in high-risk financial products.

The Bank governor added that financial firms that had received bailout money from the government due to the credit crunch should also limit their exposure to risky investments.

"It is important that banks in receipt of public support are not encouraged to try to earn their way out of that support by resuming the very activities that got them into trouble in the first place," he said.

Responding, Angela Knight of the British Bankers' Association said that firms offering "mixed banking" should not be broken up. "We believe the key issue is not one of breaking up banks but of financing the economy," she said.

Mr King made the comments in a speech in Edinburgh on Oct. 20.

Call centres criticised for credit card policy

By UK CreditCards.com

UK call centres are keeping hold of recordings containing customers' credit card details, contrary to payments industry guidelines.

This is the key finding of new research from call recording firm Veritape, conducted to mark National ID Fraud Prevention week.

According to a poll of 133 call centres conducted by the firm, over 95% of those call centres that store customer transaction conversations are not deleting mentions of credit card details.

PCI DSS, a global security standard developed by payments firms, states that this sensitive information should not be kept.

Moreover, 61% of call centres told Veritape that they were not aware of these guidelines and 18% said that they were aware, but would not comply because of "technical or budgetary reasons." Another 11% were aware of the guidelines but were choosing not to follow them.

"What we have is a global industry standard that is routinely ignored by call centres throughout the UK," Cameron Ross, Veritape managing director, said.

"Hardware and software interventions are available that automatically delete credit card data from audio recordings."

Records of credit card-related conversations from call centres are highly useful to fraudsters, who can use the details to access accounts and steal money.