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OFT to lay down responsible lending law

The Office of Fair Trading is to produce guidelines on irresponsible lending and collections practices.

The OFT today launched a public consultation on the scope of its irresponsible lending project. It follows changes to the Consumer Credit Act, which include the identification of irresponsible lending as something the OFT must consider when granting consumer credit licences.

The project will involve consultation with business, consumer groups and other stakeholders. The OFT will then issue clear guidance on lending behaviours and practices which it considers to be irresponsible. The study will consider all forms of consumer credit lending which the OFT licences and all participants in the market, including lenders, brokers and other intermediaries.

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.

The OFT will be contacting key stakeholders directly. Full details of how to contribute to the consultation can be found on the OFT website at www.oft.gov.uk

This article was sourced from www.credittoday.co.uk

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