Extortionate credit in the UKAuthors: Professor Elaine Kempson, Claire Whyley
Funded by: Department of Trade and Industry
Published by: Department of Trade and Industry
Publication date: June 1999
The Consumer Credit Act states that a credit bargain is extortionate if it requires the debtor or a relative to make payments which are grossly exorbitant; or it otherwise contravenes the ordinary principles of fair trading. Comprising a review of existing data and literature on extortionate credit, supplemented by interviews with key stakeholders in this area, this research provides information relating to:
- the forms of extortionate credit;
- its legislative and regulatory framework;
- the nature of the market for this type of credit;
- possible alternatives and the reasons they are not utilised;
- the subject and outcomes of court cases;
- the adequacy of the Consumer Credit Act to protect consumers against extortionate credit, and
- interest rate ceilings in other countries and their effectiveness.
Possible regulatory and legislative changes were recommended, along with other measures to address the problem of extortionate credit.
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