OFT Refers Home Credit to Competition Commission
20th December 2004

Debt on our Doorstep welcomed today's announcement that the Office of Fair Trading is to refer the home credit industry to the Competition Commission for a full investigation. The referral follows Debt on our Doorstep's work earlier this year with the National Consumer Council which resulted in a super-complaint to the OFT.

The Competition Commission have announced a deadline for initial submissions of Friday 21st January, although the full investigation could take over a year to complete. In the event that the Commission finds that competition is restricted in the industry then it has a wide range of powers at its disposal to improve competition and provide redress for consumer detriment. The powers of the Commission could go as far as implementing a rate cap if increasing competition in the industry could not improve the position of consumers within a 'reasonable' period - usually taken to mean 12 months.

Damon Gibbons, Chair of Debt on our Doorstep today urged all credit unions, church groups, community associations, and advice agencies with first hand knowledge of the problems caused by home credit lenders to make a submission before the expiry of the January deadline:

'This is a fantastic opportunity to reveal the true extent of the problems associated with home credit lending. Anyone who has seen debts spiral out of control as a result of rolling over of loans, or witnessed the problems that people face in accessing alternative forms of credit needs to get their evidence into the Commission. We are confident that once the true scale of the problem is revealed, the veer of respectabiity that these companies have so far maintained will soon start to crack.'

Copies of Debt on our Doorstep submissions to the Competition Commission will be placed on the policy pages of this website in the new year. The Competition Commission pages for the home credit investigation can be accessed here