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Dept of Trade and Industry

Answer

Mr. Gardiner: To ask the Secretary of State for Trade and Industry what assessment she has made of the practice of selling debts by loan companies to debt collection companies. [136174] Mr. Sutcliffe: The Department has made no specific assessment of the practice of selling debts by loan companies to debt collection companies. Lenders and debt collectors require a licence from the Office of Fair Trading under the Consumer Credit Act 1974. The OFT issued its "Debt collection guidance-- Response to consultation paper and final guidance on unfair business practices" on 14 July 2003. The guidance specifies certain behaviour which OFT would consider in relation to taking licensing action. The guidance makes it clear that lenders must not ignore the unfair practices of debt collectors acting on their behalf, whether in-house or external. Lenders should take care in the selection of third parties, investigate complaints and take action where appropriate. Failure to do so will call their own fitness to hold a licence into question. The DTI is reaching the conclusion of its review of the Consumer Credit Act 1974. Government proposals in this area will be set out in a White Paper due for publication in December. This will address issues such as the transparency of credit products, ensuring consumers are more aware of the terms and conditions of agreements they may wish to undertake.

Secondary information

Type

Written question

Reference

136174; 412 c667W;412 c666-7W

Session

2002-03

Subjects

Consumers Companies Debts Credit Debt collection Loans Money lenders Sales Repayments

Link

View this Written question on www.publications.parliament.uk