§ Mr. Tim SmithTo ask the Chancellor of the Duchy of Lancaster what proportion of the respondents to the Office of Fair Trading survey published last autumn understood unprompted that an unsecured loan could result in the loss of the borrower's home.
§ Mr. Forth[holding answer 23 March 1989]: The Office of Fair Trading, following the survey "Consumers' Use of Credit", has not published the proportion of respondents who, unprompted, understood that an unsecured loan could result in the loss of the borrower's home. However the survey did show that 44 per cent. of respondents claimed to have no idea of the difference between a secured loan and an unsecured loan.
§ Mr. Tim SmithTo ask the Chancellor of the Duchy of Lancaster why he does not propose to include unsecured loans in regulations under the Consumer Credit Act 1974, requiring advertisements for loans to carry a health warning.
§ Mr. Forth[holding answer 23 March 1989]: Evidence suggests that many consumers do not understand the difference between a secured loan and an unsecured loan. The report of the review body on civil justice (Cm. 394), concluded that sales of property following the granting of a charging order very rarely took place. I do not believe therefore that there is any justification for extending a "health" warning to cover unsecured loans.