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Doorstep loans to become more competitive

The doorstep loans market is set to become more competitive and transparent under new laws unveiled yesterday.

The Competition Commission has set out new rules for the practice of home credit lending, which generally involves small sums, with payments collected from the customer's house.

Under the new measures, lenders will be required to publish prices on a comparison website, offer a good rebate for those who repay their loans early and ensure that lenders share data regarding customers' payment histories.

The moves have been prompted by research by the commission, which suggests that the doorstep loans industry makes £75 million more than it should a year from Britain's poorest families.

"We are very aware of the difficulties people on lower incomes can face in this area," commented the commission's chairman Peter Freeman.

"We have directed actions towards increasing customers’ options rather than reducing their access to a necessary source of credit."

Doorstep loans charge, on average, nine per cent more than they should, the commission claims.

Click here to see how much you could borrow with Lombard Direct.

01/12/2006 12:30:13

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