Response to OFT draft guidance on irresponsible lending

Strongly welcoming the draft guidance on irresponsible lending published yesterday by the Office of Fair Trading (OFT), Citizens Advice debt policy officer Peter Tutton said:

“We have been saying for a very long time that there is a need for effective action to tackle irresponsible lending. Despite the credit crunch we are still seeing cases where people have been given credit that they cannot afford that has caused or contributed to severe debt problems. The recovery needs to be based on a new foundation of fairness and responsible lending if we are not to see a repeat of the current crisis a few years down the line. These proposed guidelines from the OFT set out a clear framework that should leave lenders in no doubt about the steps they must take to check people’s ability to pay back what they owe and to make sure people fully understand the terms of any credit they are taking out. The guidelines make it clear the OFT means business and are determined to act against lenders that behave irresponsibly, and we back them all the way in doing this.”