Lenders to be forced to declare real cost of loans
Under tough new proposals lenders - be they loan sharks, banks or credit card firms - will be required to display the real cost of credit before and d
17:08 23 November 2004
Under tough new proposals lenders - be they loan sharks, banks or credit card firms - will be required to display the real cost of credit before and during the term of the loan.
The proposals were contained within the Consumer Credit Bill, outlined in the Queen's Speech today.
Proposals include surprise raids and fines for loan sharks and victims of extortionate rates being able to claim compensation against lenders.
Those in financial difficulty will also be offered help from an independent ombudsman instead of being sent to court.
The Office of Fair Trading (OFT) is to be given new powers to fine rogue lenders. Currently the only action it can take is to remove a lender's credit licence.
"Consumer credit law will be updated to provide greater protection from unfair lending practices and create and fairer and more competitive credit market," the Queen said today.
"This isn't nanny government. It's ensuring everyone has choices and are best equipped to take the maximum advantage of those choices to achieve their aspirations," Peter Hain, Leader of the House of Commons, told The Times today.
"Despite rising prosperity, more needs to be done to deliver adequate pensions ... and, with far too many finding getting that first foot on the housing ladder an impossible dream, to help everyone to gain an affordable home," he added.