OFT Targets Irresponsible Lending

The Consumer Credit Act 2006 explicitly includes 'irresponsible lending' as an unfair practice relevant to the OFT when considering a licensee's fitness to hold a consumer credit licence. The OFT has now taken the initial step towards providing guidance on its position as regards the test for irresponsible lending.

This initial phase is intended to establish the overall scope of the project. While the project will major on behaviour and practices surrounding a creditor's decision to lend, it appears that the OFT's intention is to widen the scope considerably to include product design, marketing, suitability and arrears management and even the sale of associated products. The OFT's view is that the wider the scope of the project, the more useful it will be for businesses and consumers alike. While one can see the attractiveness of this approach from the OFT's perspective, it may be considered by the