New FSA powers challenge rogue lenders

by Gill Montia

Story link: New FSA powers challenge rogue lenders

Consumers should face better protection from rogue lenders under new Government proposals.

Loan providers will have to meet more stringent conditions to secure a consumer credit licence from the Financial Services Authority and in future, the regulator will be paying particular attention to firms that use methods of debt collection that intimidate customers.

In addition, sales techniques that pressurise potential borrowers, unfair terms and conditions and extortionate interest rates will be outlawed.

The new measures will also give the Office of Fair Trading the power to fine those in breach of regulations up to £50,000 and withdraw their licences.

John Hutton, secretary of state for business and enterprise, says: “There will be more protection for people who get caught out by rogue lenders who pretend to play by the rules but act like loan sharks.”

In related news, a recent survey by price comparison website, uSwitch.com, indicats that 70% of UK loan applicants are not asked to provide proof of earnings.

Fifteen per cent of respondents said they did not even have to disclose how much they were earning on the application form.