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New consumer credit protection comes into force

  • Published: Tuesday, 1 February 2011

New rules that give consumers greater freedom and protection when taking out credit have come into force. The changes to the Consumer Credit Act also make sure that lenders act more responsibly.

New consumer credit rules

Credit and loans

More about credit, loans and credit and store cards

Under the new rules customers have:

  • up to 14 days to cancel new loan agreements (excluding loans over £60,260, loans secured on land or loans to purchase land)
  • the option to make partial early repayments on loans - at the moment borrowers are only able to pay the full amount off early

Lenders will now have greater responsibility towards consumers and must:

  • give borrowers standardised pre-contractual information to help them compare different loans
  • ensure borrowers understand the detail of their particular loan
  • carry out a thorough check on borrowers’ creditworthiness before any loan is agreed

Consumer Minister Edward Davey said: "The implementation of the Consumer Credit Directive will help strengthen a culture of responsible lending. With new legal rights for consumers and greater responsibility for lenders, consumers will be better able to take charge of their money.

"Consumers should be able to help themselves, provided they have the right help and information to do so."

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