Consumer Credit Bill re-introduced to Parliament

The Consumer Credit Bill is being re-introduced into Parliament today, the government has announced.

The Bill, which completed most of its stages in the last Parliament, aims to create a “fairer, clearer and more comeptitive credit market” by tighting regulations and giving borrowers better protection and improved rights.

Among the proposals in the Bill are plans to make it easier for consumers to challenge unfair lending practises and loan agreements, including the establishment of an independent ombudsman service; a more targeted licensing system; and an improvement in the powers of the Office of Fair Trading to enable them to take action against rogue companies.

The Bill also includes plans to create a requirement for lenders to give consumers better information about their credit accounts.

Consumer Minister Gerry Sutcliffe said that the consumer credit market had “changed immeasurably” since it was last reformed 30 years ago. He said: “While credit is a useful tool for the majority, unfair lending and ill-informed borrowing decisions can cause real problems for some people. This Bill is an important step towards achieving our objectives or creating a fair, clear and competitive consumer credit market and enhancing consumer protection, particularly for the most vulnerable.”

The Consumer Credit Bill was one of the bills announced during the Queen’s Speech at the opening of Parliament earlier this week. CBI Deputy-General John Cridland said that a review of consumer credit laws was needed, but warned that the Bill must be “workable and practicable”. He said: “It is in the interests of consumers and business to have legislative certainty and avoid unnecessary ligtigation.”

The Bill was welcomed by consumer watchdog Which?. They urged the government to make the Bill “a priority” and to force credit card companies to have one method of calculating interest and to share their full data in order to improve responsible lending. Emma Bandey, personal finance campaigner at Which?, said: “There has been enough delay introducing important changes to the consumer credit legislation. It’s time for Parliament to tackle outdated credit laws which are putting people at financial risk and untold stress.”

The government has already introduced secondary legislation to reform the consumer credit market, including changes to the way consumer credit deals are advertised and the way consumers can sign up for credit agreements online.

A series of initiatives have also been introduced to help consumers who are in debt, including: a crackdown on loan sharks; an increase in free debt advice; and plans to increase financial literacy, particularly among young people.

(KMcA/SP)