Lord Kennedy of Southwark – 2014 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Lord Kennedy of Southwark on 2014-06-05.

To ask Her Majesty’s Government what assessment they have made of the logbook loans industry.

Lord Deighton

The Government has fundamentally reformed regulation of the consumer credit market, including logbook lenders, by transferring responsibility from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) on 1 April 2014.

The Government is very concerned about evidence of consumer detriment in the logbook loan sector, as highlighted in the FCA’s recent research paper.

The FCA has identified logbook lenders as a higher risk industry, and as such they will be in the first phase of firms to require full authorisation. Logbook loan providers are also required to meet the FCA’s binding rules, and the FCA has said that it “won’t hesitate to take action” if they do not put their customers first.

In addition, the Government has asked the Law Commission to look at how to bring the highly complex legislation underpinning logbook loans up to date.