Islanders barred from applying for credit cards

Friday 05 July 2019

Growing numbers of islanders are struggling to sign up for credit cards or renew existing ones - regardless of their credit history - due to an apparent "outright ban" on local applicants.

What only concerned a handful of isolated cases in the beginning of the year has become a more regular issue for those with Jersey postcodes, according to the Consumer Council.

The watchdog raised the issue recently in its newsletter, and since then has received over 40 calls.

Its Chairman, Carl Walker, who explained the problem to Express: “We were approached by a handful of people who were saying they were having problems extending their credit card, whether it was asking for a second name to be added, asking for a second card or for more money.

“But also people are having problems making new credit cards and that’s irrespective of the amount, or their credit history. What happens is that as soon they go to ent their address, it says: ‘We no longer offer this service to Jersey.’” 

Pictured: Carl Walker, chairman of the Consumer Council.

Mr Walker says some islanders who have stayed with the same bank for many years have also been barred from obtaining a credit card. This applies to large banks but also to credit cards provided by retail stores. 

According to one of the Council members with a background in the finance industry, the problem is linked with ring-fencing legislation, which was passed by the finance sector in the UK and EU some time ago, and came fully into force at the beginning of the year. “Something somewhere has happened,” Mr Walker said. “A switch has been switched off and people can’t apply for a credit card anymore.”

HSBC and Lloyds were named among the banks islanders have been experiencing problems with.

Contacted by Express, HSBC confirmed they do offer credit cards in the Channel Islands to individuals who are locally resident. “There are specific criteria for each of our credit cards and every application is reviewed on an individual basis, which includes credit history and credit limit checks,” a spokesperson explained.

Meanwhile a spokesperson for Lloyds said the application policy for its credit card customers in Jersey, Guernsey and the Isle of Man is currently under review.

Pictured: Credit card are the safest way to shop online, Mr Walker said.

While the Consumer Council does not seek to encourage the use of credit cards and does not want to see islanders go into debt by using them, he said they provide far more protection for frequent online consumers, both in terms of consumer rights and from hackers.

“A credit card is the safest way of internet shopping. By entering your debit card details online, you are exposing your current accounts.

“The Consumer Credit Act of 1974 also protects you in cases. If you buy tickets for a concert or if you buy a faulty item and the site won’t refund you, the credit card will refund you. There are lots of protections.”

Mr Walker is also concerned that if banks have switched off this particular service for islanders, others could also have been stopped without warning. 

Pictured: The Council is urging to islanders to get in touch if they have experienced issues when applying for credit cards.

In its latest newsletter, the Consumer Council therefore asked islanders experiencing issues with their credit cards – and who haven’t been in touch already – to contact them.

In the first few days after the newsletter was sent out, the Council received over 40 calls. “We have been inundated with calls. The phone is ringing every day so that number keeps growing,” Mr Walker said.

Even though the number might seem small compared to the population of the island, Mr Walker estimates that only up to 1,000 islanders are likely to be applying for cards at the moment, which shows that the issue is quite significant. 

With the issues not appearing to be letting up, the Chairman said the Consumer Council were now considering approaching the government to help resolve them.

“We wanted to see first if this was a big enough problem to warrant action. We may need a high level political involvement of some kind.”