Consumer Bill Must Be Strengthened
16th December 2004

Debt on our Doorstep welcomes today's announcement that the Government is to present its Consumer Credit Bill before Parliament before Christmas - raising the chance of a major overhaul of the current outdated and ineffective legislation before a General Election. However, the campaign today expressed strong reservations that the Government's proposals would fail to protect low income borrowers.

Damon Gibbons, Chair of Debt on our Doorstep, commented:

"There are lots of good things about this Bill, but it needs strengthening. The Government is refusing to acknowledge that high cost credit needs regulating on its own, quite apart from other unfair practices. The proposals, as drafted, seem to require borrowers to prove not only that the cost is a rip off, but also that there has been something misleading or underhand about the way the agreement has been entered into. That is a major let down."

Debt on our Doorstep call for the inclusion in the Bill of a power for the Office of Fair Trading to introduce a ceiling on credit charges where sections of the credit market are not competitive. This would only come into operation where evidence was provided that the cost of credit was over and above that which reflected the real costs of lending and would allow for a reasonable profit.

"The current proposals require borrowers to prove that the cost of credit is out of line with the normal market rate - that's a terrible definition and could lead to the current high rates of door to door lenders being legitimised", said Mr Gibbons.

Debt on our Doorstep will be drafting suggested amendments to the Bill and seeking Parliamentary support for these. The proposed amendments will be available from this site in the next week.