asked the Secretary of State for Trade if he has any plans to bring the building societies and insurance companies within the provisions of the Consumer Credit Act relating to the publication of the true rate of interest charged by them; and what has been the recommendation of the Office of Fair Trading on this or related matters.
[pursuant to her reply, 28 January 1980]: I have today laid regulations governing advertisements and quotations relating to consumer credit and hire facilities. They represent a major step forward in implementing the "truth in lending" provisions of the Consumer Credit Act. Their aim is to provide the consumer with sufficient information to allow him to make an informed choice between competing facilities and to enable him to obtain all the relevant details of a prospective transaction before committing himself. Among the more important disclosures which the regulations will require in some advertisements and all quotations relating to credit will be the annual percentage rate of the total charge for credit. The regulations have been framed only after extensive consultation with the credit industry as well as with consumer interests. They will not apply to local authority and building society mortgage lending, which is already exempt from most provisions of the Act.The regulations will come into operation on 6 October 1980. Traders will therefore have time to make the necessary preparations. In this they will be aided by guidance material issued by the Director General of Fair Trading.