The Consumers' Association has warned that the new rules for lenders on consumer credit may not go far enough to address confusion in the marketplace.
The Department of Trade and Industry yesterday announced that all consumers will, for the first time, get clear and detailed information about their credit agreements from lenders before they sign up, enabling them to shop around for the best deal.
But Doug Taylor, campaign team leader at the Consumers' Association, says: “While many of the regulations outlined yesterday may improve consumer welfare in the mainstream consumer credit market, the devil's in the detail. We're concerned that the proposed laws may not go far enough to address confusion in this market. We also fear that there will still be loopholes, particularly within the advertising regulations which may be open to misinterpretation.
“Specific requirements we have are in relation to consumer credit advertisements and that the APR should be shown in all advertising of all credit products and that the deadline of 2010 in relation to early settlement regulations should be made much earlier to benefit disadvantaged consumers who need to spread their payments over a longer period.
“We are also concerned that several issues may not have been addressed in the regulations including interest calculation methods, post-contractual information, credit scoring, credit data sharing, impact of risk-based pricing on the vulnerable and financial services advice. We believe these issues need to be addressed in legislation.”