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Unfair Practices: Loans

Volume 487: debated on Thursday 29 January 2009

To ask the Minister of State, Department for Business, Enterprise and Regulatory Reform what steps the Government are taking to protect consumers from unsolicited mail offering loans without clearly stating the effective rate of interest applied to the loan. (250751)

The Government have taken steps to protect consumers from misleading loan advertisements. In October 2004 the new Consumer Credit (Advertisements) Regulations came into force. These increase consistency and transparency, allowing consumers to compare financial products with confidence. Lenders are now required to provide consumers with clear information when advertising loans. Information relating to the cost of the loan must be displayed with equal prominence to other key mandatory information, ensuring consumers are not misled over additional charges or costs. In particular, any credit advertisement for a specific loan product must include a typical APR (Annual Percentage Rate of Charge).