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OFT publishes irresponsible lending guidelines
Posted by Mark Cunningham
The Office of Fair Trading (OFT) has issued new guidance for both businesses and customers warning of the consequences of irresponsible lending.
According to the organisation, the advice covers all aspects of the borrowing process and will be used to evaluate whether financial institutions are operating unethically under the Consumer Credit Act.
Firms have been told not to use "misleading or oppressive" sales tactics at any stage during a potential agreement, while also explaining key features of deals to ensure individuals are able to make an informed decision.
"Make a reasonable assessment of whether a borrower can afford to make repayments in a sustainable manner," it added.
Director of consumer credit at the body Ray Watson said the advice outlined should enable lenders to avoid behaviour that may lead to OFT action.
Last month, the authority launched a market study to explore the difficulties people have in understanding contracts presented to them by enterprises.
01/04/2010 17:41
News category: Consumer