OFT issues personal loans enforcement guidance
28 January 2010 16:34:54
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| Britons warned about misinterpreting the Consumer Credit Act. |
The Office of Fair Trading (OFT) is consulting on a draft guidance after learning that thousands of consumers have attempted to make claims against lenders recently to avoid repayments.
Ray Watson, director of consumer credit at the OFT, explained that the body is keen to prevent the act being misinterpreted by clarifying exactly when loans are enforceable.
"There has been a great deal of confusion over the meaning of these sections, with many borrowers being misled into thinking that they can get their debt written off," he said.
"This guidance is to make consumers aware that they may be at risk if they seek to use these sections to avoid paying legitimately owed debts."
The guidance comes after recent High Court rulings indicated that lenders can produce reconstituted copies of original loan documents to provide debtors with information about their arrangements.
Earlier this month, Guardian financial journalist Jill Papworth suggested that the first few weeks of 2010 will be a "prime time" for Britons to take out personal loans.
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