Consumer Credit Bill Receives Royal Assent
There is relief on the horizon for consumers and a leveler playing ground for scrupulous lending companies. The Consumer Credit Act 2006 is the largest overhaul of consumer credit legislation since 1974. Millions of consumers will find a more open market, and more protection from unfair treatment by some types of lending companies. The Consumer Credit Bill is hailed as a boost to consumer rights where money lending is involved.
The Act introduces major changes to the licensing of consumer credit businesses and gives authorities new powers to deal with complaints and violations of the law.
The Office of Fair Trading (OFT) regulates the consumer credit industry. They will receive the power to deal with violators quickly.
Lord Whitty, Chairman of the National Consumer Council, said: “We’re delighted that the millions of people who use credit will now be better protected. The Consumer Credit Act will mean a clampdown on bad business practice, ensure fair lending and provide an easy-to-use, free credit complaints service.”
Ian Mullen, Chief Executive Officer, British Bankers Association, said; ” We are pleased with the consultative approach that the DTI has taken during its thorough and far reaching review of the retail credit market, culminating in this new Act.
This will make it easier for financial institutions that offer a reasonable service to reach the people who need it. While the act will not illuminate shady practices in the financial industry, it will give people a chance to challenge the lenders. The long term effects could include a greater awareness of the benefits of short term loans over long term mortgages, choosing a long instead of an AVI, and even improve consumer debt management practices.