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Unsecured Loans

Volume 410: debated on Monday 18 August 2003

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To ask the Secretary of State for Trade and Industry (1) what powers there are to restrict young adults in borrowing large amounts of money in unsecured loans; and what plans she has for further action to limit the amount of money young adults are allowed to borrow in unsecured loans; [129752](2) whether financial services companies are required to assess a young adult client's ability to repay loans before allowing a loan; [129753](3) how many people under 25 are being prosecuted for non-payment of loans. [129754]

[holding answer 17 September 2003]: There are currently no powers to restrict the access of any individual over the age of 18 to credit.Lenders, who have signed up to voluntary codes of practice such as the British Banking Code or the Finance and Leasing Association Code, provide the majority of credit. These require them to assess a consumer's ability to repay any credit they are seeking to borrow. I intend to publish a White Paper on consumer credit this autumn, which will include proposals to require all lenders lend responsibly.Figures are not collated centrally for how many individuals are prosecuted for non-payment of loans and could be obtained only at disproportionate cost.