OFT announces 'irresponsible lending' investigation

04/08/2008

The Office of Fair Trading (OFT) is to launch a probe into what it calls "irresponsible lending" at the UK's credit providers.

Lenders, brokers and intermediaries of mortgages, unsecured loans and other forms of credit will all come under the spotlight.

The investigation follows a change in the law, which now obliges the OFT to look in to whether lenders are extending credit in a responsible way or not.

Ray Watson, OFT director of consumer credit, said: "Credit is an important part of everyday life so it is vitally important that consumers are safeguarded from irresponsible lending and that businesses have clarity about what this constitutes.

"The OFT looks forward to hearing from a wide range of businesses, consumers and representative bodies on these issues."

Initially, aspects of the industry such as providers' use of credit scoring techniques, the way in which the products are sold to customers and the handling of defaults and arrears are to be examined - with a report on the body's findings to follow.

Tags; Current UK Economy, Debt Management and Banking,

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