Loan News New Rules Could Imperil Consumers

Written by Editorial Team

29 September 2004

New measures being discussed at the Labour Party conference aiming at limiting consumer debt imperil consumers, experts have warned.

Currently, financial documents that are kept by credit reference agencies do not always have the full financial records of the person who is applying for a loan or credit card, reports the Times newspaper.

Credit reference agencies, such as Experian or Equifax do not have access to student loan information for example.

Some banks do not make customer information available to other institutions. Therefore if someone breaks his or her loan or credit card agreement, a second lender may have no knowledge of this.

New rules would throw all this information into the open.

However, financial institutions are concerned that full disclosure may be misused.

One senior banking source told the Times: “Without proper policing of how the information is used, data sharing could make matters worse, with unscrupulous competitors being able to identify people who are hungry for credit, and marketing loans aggressively to them.