Consumers Forced To Wait For New Act

The Government yesterday launched a timetable for the implementation of the new Consumer Credit Act 2006. Consumer Minister, Ian McCartney said: "As the provisions of the act are brought into force, businesses and individuals will begin to notice real improvements to the regulation of consumer credit, and borrowers will be better protected against rogue lenders."

However, the new unfair relationships test which will allow consumers to take action in the courts against the worst lending practices, will not come into force until April 2007. Consumers will have to wait until the same time for the possibility of accessing a free and independent dispute resolution scheme, provided by the Financial Ombudsman Service. And it will be April 2008 before lenders will be obliged to give their customers clearer and more regular information on the state of their credit accounts and changes to the licensing regime are made.

The DTI's implementation plan has been largely reliant on the demands of business, with very little consumer representation on the implementation working groups. Debt on our Doorstep's request to be included was declined by the DTI earlier this year. Unsurprisingly, business representatives have praised the timetable:

Ian Mullen, Chief Executive of British Bankers Association said: "We have been pleased with the DTI's willingness to work with industry in the implementation of the Act. "The introduction of the changes to the UK's existing credit regime is a significant challenge that will be made easier by DTI's readiness to listen to industry concerns and adapt plans accordingly."

The OFT have welcomed the reforms in the Act, including the introduction of a 'responsible lending' requirement to be implemented through the licensing regime, but have so far failed to issue a timetable for the consultation that is required before that can be brought into force.