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Lending Practices

Volume 474: debated on Thursday 3 April 2008

21. To ask the Secretary of State for Business, Enterprise and Regulatory Reform what steps he is taking to prevent unscrupulous lending practices. (198433)

The Government are committed to tackling unscrupulous loan sharks who exploit vulnerable people in our poorest communities. In 2004, we established two pilot enforcement teams in Birmingham and Glasgow to track down and prosecute illegal moneylenders.

Following evaluation of the pilots, BERR announced £2.8 million in September for a national crack down on illegal lending. There’s now a team in every region of Britain and we have committed to fund this work through the next spending period.

In addition, the Consumer Credit Act 2006, which represents the biggest overhaul of consumer credit legislation since 1974, has boosted consumer rights and redress by introducing a new unfair relationships test and alternative dispute resolution scheme. From 6 April this year, it strengthens the licensing regime for consumer credit businesses to enable more effective action against rogue traders and unacceptable practices.