OFT is consulting on draft guidance on irresponsible lending practices. The guidance goes through the lending process and identifies good and bad practices. OFT’s suggestions include that lenders:
- ensure all information for prospective borrowers is clear, easy to understand and properly explained;
- assess a borrower’s likely ability to meet repayments sustainably;
- do not encourage borrowers to take on more debt when they may have trouble clearing debts;
- do not target vulnerable groups of borrowers with inappropriate products; and
- do not use high-pressure sales or inappropriate inducements.
OFT asks for comment by 21 October.