'Logbook loans' could be banned

22/12/2009

The government has announced plans to ban a form of secured borrowing which forces consumers into high cost debt.

Bills of sale, or 'logbook loans' could be outlawed after 1,000 consumers complained to the Office of Fair Trading between April 2008 and March of this year.

These relate to unfair collection practices, unclear terms and conditions and a lack of available protection.

Logbook loans are often secured on the value of cars, and the government is concerned that this will leave people vulnerable.

Consumer Minister Kevin Brennan said that the methods are "archaic and allow vulnerable people's goods to be seized without a court order".

He also noted that bills of sale can "encourage people to slip even further into debt rather than taking control of their finances".

• Share
• 
• 
• Store
• 
• Follow
•