Government seeks to ban ‘Dickensian’ loans

Bills of sale – a kind of loan that depends on a legal loophole – are to be abolished, a government minister has pledged.

Consumer minister Kevin Brennan described them as devices that were “developed in the days of Charles Dickens and don’t meet 21st century consumer standards”.

Announcing a consultation exercise on how to deal with such transactions, he argued: “They can encourage people to slip even further into debt rather than taking control of their finances.”

Such loans are secured against property like cars, which can be seized without court orders if the payments are not met.

Government figures have revealed that 40,000 of the products were taken out between April 2008 and March 2009.

In the past four years, there have been over 1,000 complaints about bills of sale made to the Office of Fair Trading.

Banning all doorstep finance would be a retrograde move, the Consumer Credit Counselling Service argued earlier this month, saying this would drive people into the hands of loan sharks.

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