Chuka Umunna, Labour’s parliamentary candidate for Streatham has called on credit card companies to clean up their act, as government proposals which ensure that consumers get a fair deal are launched.

The new rules would mean that credit card companies have to pay off customers’ most expensive debts first.

This is to prevent the practice of negative payment hierarchies whereby consumers can get stuck in debt by only paying off the portion borrowed at the cheapest rate. This change could save thousands of pounds for people paying off credit card debts.

Companies will also be banned from increasing credit limits without consent, sending unsolicited cheques and increasing interest rates on existing debts. They will be required to give consumers a full and proper explanation of how their card works before making an agreement.

Recently, the government also announced that it will intervene to ensure that excessive bank fees and charges are paid back to consumers.

Currently, the are more than one million reclaim requests for excessive charges which have been on hold since 2007, with a test case brought by the Office of Fair Trading currently going through the courts.

In the meantime, Prime Minister Gordon Brown has called on banks to resolve the outstanding claims without further delay.

Commenting, Chuka Umunna said:

“Particularly during the current economic climate, it is important that people are protected from the burden of spiralling debts and excessive charges.

“I am concerned that I often hear complaints from local people about unfair practices, exploitation and rip offs and am campaigning for action to put a stop to this

“Consumers must be treated fairly by the companies operating credit and store cards, and have a right to clear information on their finances.”