Abacus Daily Debt News

New directive ‘to promote responsible lending’

A consultation has been launched as part of steps to promote responsible lending, the government has announced.

The European Consumer Credit Directive has been proposed as a means of introducing common standards for unsecured loans and other forms of credit across the EU.

And the Department for Business, Enterprise and Regulatory Reform is now seeking views as it aims to ensure fair treatment.

Proposals include a requirement for lenders to fully explain products in order to allow borrowers to make informed decisions, as well as a right to cancel an agreement within 14 days without incurring a penalty.

Consumer minister Gareth Thomas remarked: "We want to further promote responsible lending and responsible borrowing. These measures will help with that objective."

The government recently announced that those seeking debt help are now to be given 30 days before collectors can contact them, a move welcomed by the Consumer Credit Counselling Service charity.

By Andy Mackay