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From April 2008, lenders will be required to provide consumers with clearer,
more regular information on the state of their credit accounts under the terms
of the new Consumer Credit Act 2006.
The Act would, according to Consumer Minister Ian McCartney, also help to 'root
out the rogues working in the consumer credit industry'.
Lenders themselves will benefit from a more streamlined, targeted licensing
system and appeals process.
The Act forms the biggest overhaul of consumer credit legislation since 1974.
April 2007 is the first key date for the implementation, and will see an
introduction of the new 'unfair relationships test', a move that will boost
protection for borrowers allowing them to challenge unfair treatment in Court.
In addition, consumers will be able to access a free and independent dispute
resolution scheme that the Financial Ombudsman Service will provide.
Following implementation, lenders will need to monitor their own conduct and
ensure they comply with the relevant licence conditions as under the terms of
the Act, the Office of Fair Trading will have increased powers of investigation
and enforcement.
The aim is to allow issues to be resolved earlier and more effectively but in
cases where there has been a failure to comply, the OFT will also have the power
to impose conditions on lenders or levy fines of up to £50,000.
Source:
Getting Paid
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