Partner Article

New legislation proposed to give more protection to credit card consumers

On the back of a recent government White Paper, plans to improve protection for credit card owners have been proposed by the Department for Business Innovation and Skills (BIS)

Under draft regulation, lenders will have to check consumers’ creditworthiness before they can borrow, as well as have a duty to fully explain financial products.

If implemented, the regulations will help people taking out new deals on credit and store cards, as well as personal loans as part of the Consumer Credit Directive (CCD), which will make it easier for people to lend money from banks in any European country.

Consumer Affairs Minister Kevin Brennan said: “These changes will build on the real help we’re already providing homeowners, savers, pensioners and people with debts.

“Lenders will have to check creditworthiness and provide the information consumers need to make properly informed decisions before they sign an agreement.

“Consumers will also have a new 14-day period within which they can opt out if they have second thoughts.”

The government White Paper, ‘A Better Deal for Consumers’, sets out plans to help people in financial difficulties, and longer term measures to bolster confidence.

It is hoped the legislation will be passed within the year, well in advance of the CCD coming into fruition on June 2010.

The legislation will implement the CCD requirements to provide transparent, standardised information to help consumers compare products – including the cost of credit on offer.

This was posted in Bdaily's Members' News section by Ruth Mitchell .