Gerry Sutcliffe, minister for employment relations, competition and consumers, says his officials will be looking closely at 0% finance and other credit-related offers. “Car-makers will not be able to quote only ‘£99 a month’ and any other charges will have to be displayed with equal prominence,” he says.
Sutcliffe was speaking after addressing a consumer credit conference hosted in London by the Finance and Leasing Association. The new rules apply from October 31 and Alan Pulham, the RMI franchised dealers director, has already urged members of the association to be on their guard.
The measures are part of a raft of further changes now being finalised by the DTi, which is determined to crack down on rogue lenders in all sectors. They follow a consumer credit review and will be in a Bill expected to form part of the Queen’s Speech on November 23, when the Government outlines planned legislation.
Sutcliffe told delegates: “Transparency in lending was always at the heart of our proposals. It’s about making sure people that use credit understand what they are getting themselves into. That’s not just consumers – that’s you, the credit industry, as well.”
The DTi takes a special interest in the automotive industry because cars are normally the second biggest financial commitment after a home, and it is a highly competitive sector.
The Government wants the UK to give a lead within the EU because the UK credit industry is the largest and most sophisticated in Europe. During the DTi review of the Consumer Credit Act, it sought the opinions of the FLA, other trade bodies and leading companies in the finance sector.
The objective is to make credit-advertising rules simpler and easier to interpret and enforce, enabling consumers to answer three key questions: How much will it cost me? What happens if it goes wrong? Can I afford it?
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