New plans could “weed out cowboys”

Proposals which will establish draft regulations for the Consumer Credit Directive could help protect people from bad practice on the part of creditors, one expert has suggested.

Under the new plans, lenders must ensure individuals are fully aware of the terms and conditions of financial products, as well as doing comprehensive credit checks on potential borrowers.

According to a spokesperson for the Personal Finance Society, the legislation reinforces the standards any reputable professional should be providing.

He said: “It might help weed out some of the cowboys. Really I think the message to the general public is always to use a properly-qualified professional.”

Credit searches and informing customers of the consequences of their lending is probably undertaken by the “vast majority of practitioners”, the source added.

Recent figures by Credit Action revealed that the total of personal debt in the UK reached £1,459 at the end of May 2009.

By Francis Finch