Tighter Regulation Introduced For Doorstep Loan Sales
We have reported on a number of occasions in the past about the sale and practices of providers of doorstep loans and the extremely high cost of many of the personal loan products they offer.
These companies often target market those individuals who are unable to obtain a loan or finance from a more traditional lender such as their local bank, due to factors such as having a bad credit rating, or having a history of bad debts on loans or credit cards. Usually the loans offered by doorstep lenders are provided in cash for small amounts, usually less than a thousand pounds and repayments are then collected in the same way on a weekly basis.
In the past, many individuals have taken out such loans without realising exactly what they are getting into and what level of interest they are being charged and we have all heard the horror stories about people who have ended up losing their home through taking out an initially small loan amount.
But now, new regulations have been introduced which apply to any companies or individuals who sell on the doorstep, not just loan companies. People who buy on the doorstep will now automatically receive a “cooling off” period of seven days, which allows them to think about what they have bought and gives them the opportunity to change their mind, thereby offering more protection for consumers.
A spokesman for the Office of Fair Trading said “These new regulations will mean that the law is a lot clearer for consumers. People buying goods in their own home now have a safety net of seven days in which to change their mind, regardless of who arranged the visit.”
The tighter regulations have been introduced due to the fact that 50,000 complaints were received last year alone with regard to doorstep sales and although this should ease the situation, consumers have been advised to still be extremely cautious of anybody who sells on the doorstep.
