The government has announced that that it is looking into the practice of logbook lending that allows financial professionals to seize property from those in debt without going through the courts.
According to the Financial Mail, consumer minister Kevin Brennan recently stated that a consultation regarding this and a possible ban was to take place.
“These bills of sale are archaic. They were developed in the era of Charles Dickens and don’t meet 21st Century customer standards,” he was quoted by the publication as saying.
In addition, the news source observed that approximately £30 million was sought through logbook loans in the 12 months to March, some of which came with an annual percentage rate of over 600 per cent.
It was also recently suggested by the Consumer Credit Counselling Services’ Frances Walker that doorstep loans – an unsecured transaction involving a small amount with high interest payments – are necessary.
Without these, she noted, people may turn to “less savoury” loans, such as logbooks.
By Sarah Adie