Ombudsman Move Protects Consumer Loans

10 April 2007

Consumer groups have welcomed the extension of the powers of the financial ombudsman to cover customers obtaining consumer credit from minor lenders.

Consumer credit customers now have stronger rights of protection as sections of the Consumer Credit Act of 2006 come into effect, bringing 80,000 consumer credit businesses under the purview of the Financial Ombudsman Service.

The ombudsman has traditionally overseen all the major lenders but will now supervise businesses as diverse as furniture stores, kitchen showrooms, piano-hire stores and car-dealers, all of which deal in consumer credit.

Consumers can file complaints with the ombudsman and take lenders to court.

Complaints could refer to disputes surrounding loans, pawnbroking or payment plans.

The new measures “mean that finally people who have been mis-sold loans or charged unfairly will have a proper form of redress”, Citizens Advice Bureau director of policy, Teresa Perchard, said.

The new act “complements the work we’re doing to crack down on unlicensed loan sharks, rogue estate agents and dodgy doorstep sellers, all of whom prey on the poor and vulnerable,” consumer minister Ian McCartney added.

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Written by Editorial Team