Consumer Minister reveals plans to ban bills of sale lending.

The Consumer Minister Kevin Brennan has unveiled plans to ban the use of what he claims to be an outdated law used to sell high-cost loans.

Bills of sale are typically used for ‘logbook’ loans which are secured against the value of the consumer’s car.

Brennan said: "These bills of sale are archaic and allow vulnerable peoples’ goods to be seized without a court order. They were developed in the days of Charles Dickens and don’t meet 21st century consumer standards. They can encourage people to slip even further into debt rather than taking control of their finances.

"We must consider all the options but it seems they don’t fit easily into a modern consumer regime which should allow honest businesses to thrive and offer adequate protection for consumers."

The number of registered bills of sale has risen over the years with nearly 40,000 being made between April 2008 and March 2009. This equates to around £30 million in loans to consumers.

The Office of Fair Trading reports that more than 1,000 consumers have complained about problems with these loans and claims of losses total £1.47 million in the last four years.

Complaints relate to the lack of protections available to people if they fall into arrears, unfair collection practices, the complex and confusing nature of the language used in the agreements and the excessively high cost of the loans.

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Posted 26/12/2009 12:38:55