Irresponsible lending

1 August 2008

The OFT is conducting a consultation on the scope of a project covering the irresponsible lending element of the fitness test set out in section 25 of the Consumer Credit Act 1974 (the Act).

The Consumer Credit Act 2006 amended the provisions of the Act to designate irresponsible lending an unfair business practice having a bearing on fitness to hold a consumer credit licence, but the Act does not explicitly define what is irresponsible lending. We are therefore considering what further guidance should be provided. We are gathering views and evidence from both consumer and business stakeholders on the key issues around irresponsibility. This is a very broad subject and, while we have issued guidance in the past about some aspects of irresponsibility, we need to make sure that we scope this project, and carry it forward, in a way that will give clarity and assist both business and consumers.

As a first step, Irresponsible lending - a scoping paper (pdf 134 kb) sets out our initial thinking as to possible scope and invites views.

See press release.

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