France plans crackdown on consumer credit abuses

PARIS, Dec 11 (Reuters) - The French government will launch a reform next year of the consumer credit market to prevent interest rate policy "abuses" and halt aggressive sales drives, Economy Minister Christine Lagarde said on Thursday.

At the end of last year, there were some 43 million store credit cards in circulation with some schemes charging interest of more than 20 percent.

Lagarde said France was happy with the concept of store cards, but wanted to make sure they were properly overseen.

"We want to keep, make secure and enlarge the use of consumer credit ... and we want this credit to be reasonable and responsible," Lagarde said, adding that the aim was to save households from falling too heavily into debt.

A 2007 report by Athling Management estimated that households owed some 136.4 billion euros ($179.9 billion) to the store card schemes.

The finance ministry said the government would present a law in the first quarter of 2009 which would curb aggressive advertising drives promoting the cards and force firms to present clearer information about their schemes.

It would also review the interest rates being applied.

Consumer finance in France is mainly done through units of the big banks such as BNP Paribas (BNPP.PA), Societe Generale (SOGN.PA) and Credit Agricole (CAGR.PA), or by retailers such as Galeries Lafayette ($1=.7581 Euro) (Reporting by Crispian Balmer and Jean Baptiste Vey; editing by Simon Jessop)