/24-7PressRelease/ - LONDON, UK, March 23, 2006 - A law set to be enacted soon will finally allow the Office of Fair Trading (OFT) to discipline irresponsible lenders. There have been instances of Banks lending irresponsibly to some of the customers. These Banks determine customer's credit worthiness on the basis of credit history and are not verifying their personal income.
A law is all set to be introduced this summer that will bring in more powers to OFT to curb irresponsible lending. The Consumer Credit Bill, will give new powers to the OFT.
With the introduction of this law OFT will be able to impose fines up to 50,000 pounds for lenders involved in unlawful financial practices.
Till date, the only measure OFT could take against malpractices in lending was to revoke the credit license of the lender.
Insolvencies have fast risen in Britain over the past years due to irresponsible lending. Lenders used to check credit history and give personal loans, credit cards, secured loans etc to the customers without verifying their present employment and earnings.
Experts believe irresponsible lending has been one of the reasons for people getting debt ridden and consequently bankrupt. Citizens Advice has welcomed the law and found an urgent need to curb these practices and to make law more up to date with the changing times.
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