| OFT looks at irresponsible lending |
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| 01 August 2008 | |
 The Office of Fair Trading (OFT) today launched a public consultation on the scope of its project on irresponsible lending in the UK consumer credit markets.The consultation follows major changes to the Consumer Credit Act, which include the identification of irresponsible lending as a matter to which the OFT must have regard when it considers businesses' fitness to hold a consumer credit licence.
The OFT's irresponsible lending project, will involve consultation with business, consumer groups and other stakeholders. One of the main results of the project is expected to be clear guidance on lending behaviours and practices that the OFT considers to be irresponsible.
The study will consider all forms of consumer credit lending that the OFT licences, and all participants in the market, including lenders, brokers and other intermediaries.
The initial phase involves consultation to define the range and nature of the project. The issues the review could consider include the advertising and marketing of products, selling techniques, product design, use of credit scoring techniques, appropriateness of products to borrowers, sale of associated products and management of consumers' accounts including handling of defaults and arrears.
“Credit is an important part of everyday life so it is vitally important that consumers are safeguarded from irresponsible lending, and that businesses have clarity about what this constitutes. The OFT looks forward to hearing from a wide range of businesses, consumers and representative bodies on these issues,” said Ray Watson, OFT Director of Consumer Credit.
Details of how to contribute to the consultation can be found on the OFT website at www.oft.gov.uk
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