The majority of the UK population continues to benefit from the availability of credit but a minority are facing problems with excessive debt, a government report claims.
The Department of Trade and Industry’s (DTI) progress report on tackling over-indebtedness in the UK says action by the government, the credit industry and consumer groups will make a difference for those struggling with debt.
Consumer minister Gerry Sutcliffe, says: “The Consumer Credit Bill will ensure that lenders act responsibly and that borrowers have effective recourse when treated unfairly.”
Sutcliffe claims the Bill will boost the debt advice sector with an extra £45m allocated to increases face-to-face services for those most in need. The government says it also intends to introduce tougher measures to deal with illegal money lending.
Other elements of the Bill include a £120m financial inclusion fund to improve access to affordable credit and increase the capacity of free face-to-face advice; the introduction of new consumer credit regulations; improvements to consumer rights and a strengthening of the credit licensing regime.
Department of Works and Pension minister James Plaskitt, says the government is working to ensure those on low incomes do not have to rely on high cost lenders and the contribution by the Social Fund Budgeting Loan scheme will be further enhanced by an additional £210m from April 2006 to 2008 with the intention that the money will be used to improve access to interest free loans targeted at people on benefit.
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