OFT launches irresponsible lending review
by Gill Montia
Story link: OFT launches irresponsible lending review
The Office of Fair Trading (OFT) has launched the fist stage of its investigation into irresponsible lending in UK consumer credit markets.
The move follows changes to the Consumer Credit Act which require the OFT to include irresponsible lending among the matters it considers when deciding if a businesses is fit to hold a consumer credit licence.
The government body is initially undertaking a consultation with business, consumer groups and other stakeholders.
From this, it expects to establish guidance on lending behaviours and practices that it considers to be irresponsible.
All forms of consumer credit lending will be included in the process as will all participants in the market, including lenders, brokers and other intermediaries.
Once the consultation has defined the range and nature of the project, the OFT will review areas such as advertising and marketing, selling techniques, product design, use of credit scoring techniques, appropriateness of products to borrowers, sale of associated products and management of consumers’ accounts.
There are around 120,000 consumer credit licence holders in the UK and the OFT can refuse or revoke a licence if it decides that a trader unfit.
Those involved in the consultation will be contacted directly by the OFT.