Major shake-up of credit laws announced
A fairer, clearer and more competitive credit market has been promised with the announcement of the Consumer Credit Bill.
Trade and Industry Secretary Patricia Hewitt, announcing the bill today, said customers will get better protection and more rights should the bill get through Parliament.
Current credit laws were introduced in the 1970s, when the availability and use of credit was much more limited than today.
Thirty years on there are thousands of credit products for consumers to choose from with consumers making much more use of the credit services available.
Included in the bill are new measures such as a test that will let customers challenge unfair practises and terms.
Consumers will benefit from a new ombudsman service, which means that consumers wishing to challenge agreements will now not have to go to court.
Lenders, such as banks and credit agencies, will also be obliged to give consumers better information about the products they provide.
Ms Hewitt said: “For most people credit is a useful tool for managing their finances. But misleading information and unfair action by rogue lenders are a real problem for vulnerable consumers.
“After working closely with consumer groups, regulators and the industry we are taking action to improve protection for all consumers, and to make regulation better for reputable credit businesses.”
The new measures have received the support of the Citizens Advice Bureau and the Office of Fair Trading.
Teresa Perchard, director of policy at Citizens Advice, commented: “Too many consumers have suffered for far too long for want of effective protection from the rogues and villains in the credit market. At long last the Government is calling time on credit rip-offs. This bill offers a real chance of relief from abusive, aggressive and unfair behaviour by lenders and debt collectors. Those firms that do treat their customers fairly should not fear these much needed reforms.”
John Vickers, Office of Fair Trading chairman, added: “Reform is necessary to ensure that credit regulation is relevant to today’s growing credit market, enabling more effective regulation of the credit industry and greater consumer protection.”
