A consultation looking into the future of consumers’ right to end hire purchase and conditional sale agreements has been launched by the Department of Trade and Industry.

The aim of the consultation is to inform Government policy on whether voluntary termination (VT) legislation is in the right format and relevant in today's consumer credit market – including the retail automotive finance sector.

Voluntary Termination enables a consumer to hand back any goods and not pay anymore when they have paid 50% of the hire purchase or conditional sale agreement, and has been widely exploited by car buyers in recent years. The alternative proposals advanced by the DTI are:

to retain the current provisions

to allow creditors to recover a higher proportion of the amount owed to them

or to remove the voluntary termination provision from legislation.

The consultation is open to anyone who wishes to respond and forms part of the Government's review of the consumer credit market. It will run for twelve weeks. The consultation can be found at www.dti.gov.uk/ccp/consultations.htm