Data protection laws on consumers’ financial circumstances could be scrapped under a Conservative government to promote responsible lending.
In a speech at the Conservative debt summit last week, shadow chancellor George Osborne outlined six action plans to clamp down on spiralling debt and help people manage their finances better.
As well as promising to tackle low levels of financial literacy and awareness through the national curriculum, he proposed a Tory government would help lenders overcome data protection legislation to make it easier for them to lend responsibly.
He says: “We should consider extending data sharing among lenders, particularly for unsecured debt, so that lenders know their clients’ full financial picture before agreeing to more loans.”
Osborne also proposes introducing a seven-day cooling off period on store cards so that customers have time to weigh up the appropriateness of this type of credit before being able to use it. Credit card companies will also be made to provide clearer information on their costs and charges.
“Unscrupulous” individual voluntary agreement companies came under Osborne’s wrath during his speech, as the shadow chancellor called for more honest and ethical marketing of IVA products and clearer disclosure of associated fees and charges. He revealed he is writing to the Advertising Standards Authority to request it looks closely at whether companies are in breach of the advertising code.
Osborne says: “The government has a responsibility to promote the legal framework, businesses have a responsibility to do the right thing, and individuals have a responsibility not to get themselves into trouble.”
But Vince Cable, shadow chancellor of the Liberal Democrat party, slams the action plan as “two-faced”.
He says: “This is nothing more than spin from a shadow chancellor that has no grasp of the issues facing the British public.”