Related Information

Debt collection

In setting out the requirements of the Consumer Credit Act and subsequent legislation on the debt collection industry, the OFT has produced Debt Collection Guidance (updated in 2011). Creditors should satisfy themselves that any agency they employ to collect debts are acting in accordance with the guidance.

Standard debt collection letters – the Credit Services Association and Debt Buyers & Sellers Group have produced guidance in association with OFT for the use and format of standard debt collection letters.

Credit advertising

The EU Consumer Credit Directive introduced new requirements for credit advertising.

Irresponsible Lending

The Consumer Credit Act 2006 made specific amendment to the Consumer Credit Act 1974 requiring the OFT to consider whether a licensee is engaged in irresponsible lending practices when assessing their suitability as a licence-holder.  When consumer credit was transferred to the FCA CONC sourcebook, its irresponsible lending guidlines were transferred with it.

In general, however, the OFT would expect creditors to adhere to the following principles:

• not use misleading or oppressive behaviour when advertising, selling, or seeking to enforce a credit agreement
• make a reasonable assessment of whether a borrower can afford to meet repayments in a sustainable manner
• explain the key features of the credit agreement to enable the borrower to make an informed choice
• monitor the borrower’s repayment record during the course of the agreement, offering assistance where borrowers appear to be experiencing difficulty and
• treat borrowers fairly and with forbearance if they experience difficulties.

In addition the OFT would also expect creditors to:

• Be transparent about all aspects of the lending process
• Disclose all key terms and conditions making sure all information is clear and intelligible
• treat borrowers fairly by ensuring all products sold are appropriate to their needs
• demonstrate forbearance and consideration where a borrower is experiencing difficulties act proportionately in dealings with borrowers