The government has launched a call for evidence reforming the regulation of consumer credit and personal insolvency.
The Department for Business Industry and Skills and the Treasury said they were looking to establish a ‘fairer deal’ for people when borrowing money and managing their debt.
The consultation is seeking views on the following issues: how to tackle unfair bank charges, introducing a cooling-off period for store cards, introducing a power to cap interest rates on credit and improving information to help consumers judge which credit card is best for them.
Consumer minister Edward Davey said: “Well-informed, empowered consumers are central to our vision for how a credit market between customers and lenders should work. I want to encourage both to take responsible decisions and to strengthen protection where necessary – particularly for the most vulnerable.”
He said that current people faced a ‘confusing array of debt remedies’ if they were in financial difficulties so the government wanted to look at improving the current insolvency regime.
Financial secretary to the Treasury, Mark Hoban, said the coalition was committed to ‘curbing unsustainable lending’.
Head of consumer finance at the Finance & Lending Association said there had been a large amount of credit regulation recently and care needed to be taken to ‘avoid unintended consequences for consumers from any new proposals.’
Chief executive of the Money Advice Trust, an advice charity, Joanna Elson said the trust welcomed the opportunity to input into the review.
She said the level of personal debt in the UK was ‘nothing short of eye-watering’ and the role of free debt advice agencies, like the trust’s National Debtline, had never been more crucial.
The government plans to publish its reform proposals following the review in 2011.
© Fair Investment Company Ltd