The Office of Fair Trading's (OFT) proposed measures for the unsecured credit market have been welcomed by the Association of Business Recovery Professionals (R3). The regulatory body is considering taking action following a super complaint by Citizens Advice, which indicated that some unscrupulous credit brokers are charging vulnerable customers for finding them unsecured loans without actually delivering. Highlighting the poor practice that still persists in the unsecured loans market, R3 said that its own research indicated nearly one million people are struggling with debts, while a further two million have taken out a payday loan this year.
Julie Palmer, an R3 councillor, welcomed any measures that protect consumers looking for unsecured loans, however she recommended that those struggling with debt look for sound financial advice first. "Those who seek financial advice should be put in the debt solution which best suits their needs, rather than being shoe-horned into the wrong procedure," Ms Palmer said. "We hope that the OFT's new guidance will go some way to ensuring that debtors are given clear and impartial advice which makes them aware of all their options from the start."
The Association of British Credit Unions has also issued a positive response to the OFT's proposed guidance on standards for credit brokers and debt management companies. The government will also be asked to consider legislation banning upfront fees in the sub-prime unsecured brokerage market for loans. People looking online for loans should:
• Compare a number of products from different providers to find the one that is best for their needs
• Consider more than just the headline rates. Are there any additional charges or fees?
• Remember that comparison sites such as moneyexpert.com often exclusively offer the best deals