Edward Davey, the consumer affairs minister, announced this week that the government are planning to review the away that consumers are granted credit and how they deal with personal debt problems.
In particular the review will look at consumer understanding of the agreements they take out with regards to loans and credit card agreements as well as personal insolvency options like bankruptcy and Individual Voluntary Arrangements (IVAs).
Consumers could even face new financial literacy tests before taking out a new financial agreement, to ensure they understand the implications. The study will aim to investigate what happens when insolvency agreements do not go according to plan and if consumers understand their rights, as well as looking at the fairness of deals available.
According to Mr. Davey the study will provide the basis for a new consumer credit policy which will be announced later in the year, or in early 2011.
Mr. Davey said: “I want to be sure that people can get fair deals on credit cards, loans and other products on the market – improving access for the financially excluded; having an insolvency regime where those who can, pay, but those who can’t are helped to make a fresh start; and ensuring a regulatory framework that’s fair to consumers and creditors alike.”
The investigation, which is called ‘The Call for Evidence’ will be carried out in cooperation with the new Financial Secretary, Mark Hoban and will commence this summer.
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