The Government have no plans to introduce specific protections in this area. However, recent reforms have strengthened protections for vulnerable consumers.
From April 2008, reforms to the consumer credit licensing regime introduced by the Consumer Credit Act 2007 have given the OFT stronger powers to investigate and take action against rogue traders who lend irresponsibly. OFT will take a risk-based approach to enforcement, focusing its activities on those sectors where the risk of consumer detriment is highest. It has indicated that the home credit sector will be among those most carefully monitored. OFT will bring forward guidance this year for lenders about activities which may constitute irresponsible lending.
Furthermore, the Consumer Protection from Unfair Trading Regulations 2008, which come into force on 26 May, provide additional protection for vulnerable consumers. Under these regulations, a commercial practice, such as aggressive or misleading sales techniques, may be found unlawful where it is likely to adversely affect only a clearly identifiable group of vulnerable consumers in a way which a trader can reasonably foresee, by virtue of mental or physical infirmity, age or credulity.
The consumer credit directive, which will be transposed into UK law by 2010, will provide further consumer protections through the introduction of a general right of withdrawal from credit agreements within scope, giving consumers a 14 day cooling-off period after signing their agreement. The Government will also bring forward regulations extending cancellation rights to contracts for goods and services purchased on the doorstep following a solicited visit by a trader. Consultation on draft regulations closed last month.
The Government would expect all lenders to observe the Money Advice Liaison Group's best practice guidelines on debt management in relation to people with mental health problems.