The Government’s Consumer White Paper today announces new measures in order to crack down on rogue traders.

The paper entitled ‘A Better Deal For Consumers’ bans unsolicited credit card cheques as a way ro promote responsible lending and borrowing and provides longer term framework to enhance and enforce consumer rights in the wider economy.

The Measures

Some of the measures that will be put in place include:

- Significant reforms in the regulations of credit and store cards so that consumers are in more control of their borrowing – helping people avoid running up huge debt they can’t afford to pay back;

- Bans unsolicited credit card cheques so that consumers unaware of high interest rate charges don’t get caught out;

- An Office of Fair Trading review into the market for high cost credit, usually above 50% APR – pay day loans and door step lending;

- A new Consumer Advocate responsible for the co-ordination of work to educate consumers and help them get their money back when things go wrong has been appointed;

- New court powers to ban persistent rogue traders including a new national specialist team for internet enforcement tackling scams over the internet; money for a central ‘Fighting Fund’ to tackle large scale rogue traders; and a pilot scheme giving Trading Standards officers powers to help consumers reclaim their money;

- Also, a Money Advice Trust new self-help tool-kit, and a new Debtor’s Guide from the Insolvency Service to help those in debt stay in control of their finance.

What Lord Mandelson, Business Secretary Has To Say:

 “The Government is determined to help consumers during the current economic difficulties. Many family budgets are under unprecedented strain.

“We’re already providing targeted help to protect people from falling into debt and to support those who get into difficulty.

“But we need to do more. Our aim is to help consumers make better informed borrowing decisions.”

Credit and store card reviews will look at restrictions that could be put in place regarding the rise of interest rates on existing debts. It will also consider the minimum monthly repayments that should be made to fight debt levels and at the practice of increasing borrowers’ credit limits without their consent should be banned, along with the order that debts should be paid off in.

There will be new requirements for all lenders to check consumers’ creditworthiness before they can borrow. Also regulations explaining financial products fully, including consequences of failing to pay as well as new OFT guidance to tackle irresponsible lending.

Consumers will also be allowed to compare the cost of different credit cards based on their intended use. The Financial Services Authority’s Moneymadeclear website will soon host a new objective comparison table to help consumers make the right, informed choice.

What Do You Think?

How much will this affect your business? Are the measures for the best, or are they going to make things worse? We want to know your thoughts and opinions. Leave your comments here.

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