Making Sense Of Money

Doorstep Collected Loans – The Safety Of Home Credit

Doorstep Collected Loans - Home Credit SafetyDoorstep lending has been the subject of a great deal of publicity over recent years … and not all of it good! That’s why the home credit industry has tidied up its act and legislation put in place in order to protect the consumer from loan sharks, improve perception and restore the confidence in these home collected loans.

Doorstep collected loans provide access to small cash loans that, whilst interest rates may often be high, are made simple and affordable and structured so that they are available and appealing to those on lower income or the subject to previous credit problems. The transaction is carried out in the applicant’s home, the loan is hand delivered, often in cash and the repayments are split into affordable, weekly instalments, spread over a term of up to a year and collected by a local agent.

These loans do have their place in today’s society but have long been associated with unscrupulous lenders and loan sharks – hence the need to tighten up!

Consumer Credit Licence: Legislation now dictates that all doorstep lenders hold a Consumer Credit Licence as issued by the Office Of Fair Trading or OFT as it’s better known. From April 2014 though, part of the Government’s programme of regulatory changes for financial services, the regulation of consumer credit will transfer from the OFT to the Financial Conduct Authority or FCA.

Under the terms of the Consumer Credit Act of 1974 the OFT has a legal obligation to provide an accurate record of each and every consumer credit licence holders. This register includes both current and historical licence applications along with current and previous holders of licences past and present. It also lists licence renewals, alterations to licence holder information / details, applications that have been declined or revoked and any resulting appeals.

The big advantage to any potential borrower is that they are now able to easily check any lenders status. It’s as simple as logging onto www.fca.org.uk and checking any lender against the Consumer Credit Register. It’s a very fast process that doesn’t cost a penny to check and the register is incredibly simple to navigate. It’s highly recommended to check any company before entering into any credit agreement and the golden rule is that if a company doesn’t hold a valid Consumer Credit Agreement then don’t even contemplate any form of financial transaction of home credit agreement.

Consumer Credit Association: The home credit industry formed its own trade association back in 1978. The Consumer Credit Association was set up to improve the image and standards associated with doorstep lending and to build consumer confidence in the home credit industry as a whole.

There’s a surprising number of home credit lenders with most major companies having full membership of the CCA which currently stands at around 500 members throughout the UK either offering a national or local service and all of whom have been assessed to ensure compliance to the high standards required by the CCA, its constitution and the code of practice.

With that in mind, anyone thinking about entering into any home credit agreement, the Consumer Credit Association is a pretty good starting point to find a reputable lender providing a local service – a simple visit to the website is all it takes: http://www.ccauk.org/

Lenders Compared: As we said earlier the home credit industry has not always had the best of reputations and, back in 2004, as a result of a Competition Commission investigation into doorstep lending practices a brand new, completely independent price comparison website was launched to make certain of fair and healthy competition between doorstep lenders with the customer interests in mind.

This now means that anyone thinking about a doorstep loan or indeed any form of home credit is able to check and compare the cost home credit via the official comparison website www.lenderscompared.org.uk. You’ll find details of this site listed on all promotional material of all reputable doorstep lenders. Always check with Lenders Compared before entering into any agreement – don’t get ripped off!

Complaints & The CCA: Another reason for choosing a CCA member as your home credit provider is their complaints procedure. A complaint of any description against any member of the CCA there is subject to a formal procedure. The actual process can be accessed at and complaints raised via: http://www.ccauk.org/information-for-consumers/advice-and-complaints/

Doorstep Loan Sharks & Illegal Lending: When it comes to doorstep collection loans there is a much greater degree of safety by following the suggestions above and don’t forget … any doubts about a lender – DON’T DEAL WITH THEM.

Don’t forget that anyone lending money has to hold a Consumer Credit Licence, if they don’t they are breaking the law and operating illegally – these are the lenders known as loan sharks.

If you become a victim of or approached by any such illegal money lender you should immediately report them and it’s really important that you do – for your own sake and the sake of others. There are several ways to do this:

1: Phone the Illegal Money Lending Hotline on 0300 555 2222

2: Send an email to reportaloanshark@stoploansharks.gov.uk

3: Text loan shark followed by the lenders details to 60003.

Whichever way you communicate you can rest assured that ALL contact is anonymous, confidential and completely safe. Pease don’t hesitate to make contact if you have any concerns relating to any doorstep loans or lenders whatsoever.

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