OFT to scrutinize debt consolidation

The Office of Fair Trading is conducting a study over the next six months to establish how much consumer know about the debt market and what they are committing themselves to when consolidating loans. Debt consolidation is thought to make up around 60% of all second mortgages and is worth around £8.7bn in secured loans. Yet the OFT is concerned that many consumers are not aware consolidating credit cards and other unsecured loans is effectively taking out a second mortgage. The OFT says it also wants to ensure lenders are being responsible in their dealings with consumers, as...