Loan Companies: Interest Rates

Debate between Baroness O'Loan and Baroness Wilcox

Tuesday 13th December 2011 Lords Chamber

[Baroness Wilcox]

My noble friend was not only the Minister for Consumer Affairs but the chairman of the National Consumer Council for some years, so if she speaks on this subject we know that she speaks with authority. She is absolutely right; to be an informed consumer is the most important gift that we can give to people when they make purchases or take out a loan. We have started discussions with the industry to check that people are giving out the right information, and in April next year we will move free advice to the Money Advice Service, which will be co-ordinating debt advice across the country.

[Baroness O'Loan]

My Lords, in light of the reductions in welfare benefits coming down the road, are there any plans to address the critical period of debt and introduce effective regulations that will require advertisements in the windows of these money shops to say exactly what a loan will cost? For example, if you borrow £100 for a month it will cost you £X. That sort of information would immediately alert people to the risks that they are running. We cannot afford to wait for commissions of inquiry and academic research about something that, as the noble Baroness has said, is a long-standing problem.

[Baroness Wilcox]

The Office of Fair Trading is always vigilant and always has its eyes on this to make sure that the information is out there. That is a particularly good piece of advice, however. I will see whether this is being done and, if not, what we can do to take it forward.