Proposed Changes to The Consumer Credit Regime, Including Reforms Concerning Consumer Credit On-Line

On 8th December 2003, the DTI published a White Paper entitled "Fair, Clear and Competitive--The Consumer Credit Market in the 21st Century" (the White Paper) as part of its review of the Consumer Credit Act 1974 (CCA), including proposed changes to regulate the conclusion of on-line consumer credit agreements.

The White Paper outlines the Government's proposals for reform of consumer credit under a number of headings including: (i) establishing a more transparent regime by (a) changing the advertising regulations to make credit advertisements clearer and simpler for consumers to understand, (b) providing consumers with clearer information before and after agreements are signed, (c) changing the law to prevent those who settle loans early from being penalised and (d) enabling consumers to enter into and conclude agreements on-line; (ii) creating a fairer framework that encourages competition while stamping out irresponsible and unfair lending practices by (a) strengthening the credit licensing regime to target rogue and unfair practices, (b) changing the law to end unfair selling practices, including replacing a limited extortionate test with a wider unfairness test and providing an effective dispute resolution mechanism and (c) removing the £25,000 financial limit that creates a two tier lending framework and impedes consumer protection; (iii) shaping the European agenda, particularly in the context of two draft Commission Directives in the consumer credit sector (mentioned below); and (iv) minimising over indebtedness (althoug...

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