§ Mr. Leigh
The Government are today sending out a consultative document about its proposals for legislation on credit marketing.
The proposals in the December 1990 consultative document have been revised to take account of the views expressed by consultees. The main aim continues to be to alert consumers more effectively to the costs and risks involved in credit agreements before they commit themselves to enter into agreements or make greater use of existing facilities. However, the proposals have been modified to ensure that the new requirements do not inconvenience the majority of consumers who use credit responsibly nor add unnecessarily to the burdens of business.
While most of the proposals are substantially the same as those on which consultation has already been completed, there are many changes of detail. The main purpose of a second consultation is to obtain views on the detail and in particular on the draft implementing legislation. However, views on any aspect of the proposals will, of course, be considered.
Most of the proposals can be implemented by regulation made under the Consumer Credit Act 1974 arid it is intended to make these regulations early in 1992. The main changes to be made by regulations are that health warnings and additional information be included in credit advertisements, quotations and agreements; stopping inertia selling in connection with credit; and banning unsolicited increases in credit limits other than to adjust for inflation.
The proposals to extend cancellation rights and to limit the defences available for breaching the prohibition on sending credit circulars to minors will require primary legislation to amend the Act. As soon as legislative time is available the Government intend to introduce a Bill to make these amendments as well as making the deregulatory changes announced in the 1988 White Paper "Releasing Enterprise".
Copies of the consultative document have been placed in the Library, and copies will be available from the Vote Office.