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Starting Date: 11-10-06
Closing Date: 11-01-07
The Government is keen to promote responsible lending in the credit market as part of its strategy to minimise over-indebtedness. One aspect of responsible lending concerns the making of lending decisions. Lenders are encouraged, wherever practicable, to consider the full extent of a consumer’s credit commitments when deciding whether or not to lend to that individual. This is usually achieved through the sharing of credit data via Credit Reference Agencies.
The consumer gives their permission to the lender to share their data via a “fair processing” notice contained within the credit agreement. However, accounts opened before the late 1990s typically did not contain such fair processing notices. In practice this means that lenders are unable to share data, other than instances of default, on about 40 million accounts (of which about 33 milllion are estimated to be current accounts). This is compared with around 350 million accounts on which data is currently shared.
This consultation sought views on the extent to which this non-consensual credit data could be shared by lenders, subject to appropriate safeguards, in order to enable lenders to make better, more responsible, lending decisions.
The Government has now considered the responses to the consultation and have decided to establish an expert working group to examine in detail the costs, benefits and options - see Response document below.