Consumer Credit Consultancy and Training

New Rules for the Home Collection Lending Market

The Home Credit Market Investigation Order, made by the Competition Commission, came into force on the 4 October 2007. It has the following effects, which are additional to the existing or planned Consumer Credit Act controls:

Data sharing – all credit agreements involving home collection must include confirmation from the debtor that he or she consents to data sharing. By 13 March 2008, all businesses in the sector which have at least 60 agents and a home credit turnover of at least £2m (the 14 largest companies) must have arrangements with at least two credit reference agencies, and by 4 October 2007, these companies must have full data-sharing must be in place, except where the debtor does not give consent.
An independent website is to be set up within six months of the Competition Commission approving the operator. All home collection lenders will have to contribute their charging rates within six months of the website becoming operational; credit unions will also be able to advertise their rates.
All payment books and advertisements from that date must contain the statement “Compare the prices of home collected and other cash loans available in your area at www.lenderscompared.org.uk”. The website will be live from 1 August 2008.
Statements have to be provided on request, in accordance with the new rules being brought in by BERR from 1 October 2008.
From that date, all payment books and advertisements must state:
”All home credit customers are entitled to a free detailed statement once every 3 months; just ask.”
Early settlement – deferment is reduced from the normal 28 days to 13 days on cash loans by home collection lenders; early settlement statements have to state the shortened deferment and the total amount to discharge the debt.
OFT is given the right to request any information which it wishes from home credit firms, and may publish any information or documents received.