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The OFT has today published its draft guidance on irresponsible lending following a consultation process ongoing since August 2008. The industry and consumer groups have until October to put forward any concerns.
Non compliance with the guidance could result in a company losing their consumer credit licence.
The draft guidance identifies types of policies and procedures that the OFT would expect lenders to put into practice, and compliments areas of the OFT664 Debt Collection guidance.
Alongside more checks on affordability and suitability, futher guidance has been included on post contract issues - these include restrictions against:
These areas of guidance are welcomed by Legal Beagles however we hope to submit a response to the OFT asking for further clarification on some areas.
You can read the full consultation draft guidance here http://www.oft.gov.uk/shared_oft/con...oft1107con.pdf, We would be grateful for all input
Non compliance with the guidance could result in a company losing their consumer credit licence.
The draft guidance identifies types of policies and procedures that the OFT would expect lenders to put into practice, and compliments areas of the OFT664 Debt Collection guidance.
Alongside more checks on affordability and suitability, futher guidance has been included on post contract issues - these include restrictions against:
- Obstructing cancellation of signed agreements within the cooling off period
- Raising a credit limit without notification or consent
- Taking court action without giving the borrower 15 working days notice
- Taking court action when an account is in dispute
- Making undue, excessive or inappropriate use of statutory demands
- Insisting that all arrears are paid in one payment, or in unduly large amounts, and/or within an unreasonably short period.
These areas of guidance are welcomed by Legal Beagles however we hope to submit a response to the OFT asking for further clarification on some areas.
You can read the full consultation draft guidance here http://www.oft.gov.uk/shared_oft/con...oft1107con.pdf, We would be grateful for all input
