Trading Standards are responsible for regulating the consumer credit market and monitor such things as advertisements for credit, the content of credit agreements and the conduct of licensed lenders to make sure they comply with legislation designed to protect consumers.
Licensed money lenders
Legitimate consumer credit providers, adjusters and advisors are licensed under the Consumer Credit Act under different categories, and need to demonstrate that they are fit and proper to hold a licence. If a business sells goods or services on credit, lends money, or provides debt counselling or debt-adjusting services to consumers then they will almost certainly need to be licensed by the Office of Fair Trading.
Providing or arranging consumer credit without a licence is a criminal offence and can result in a fine and/or imprisonment. Businesses cannot legally enforce a credit agreement if they are not licensed.
Illegal money lenders
Coping with debt and financial hardship can sometimes mean that vulnerable people are attracted to Loan Sharks. Loan Sharks act illegally and charge extortionate rates of interest, which can run into 1000's of % APR. The borrower may never be able to repay the loan. Loan Sharks use threats and intimidation to keep their victims locked in to owing them money. Trading Standards are very keen to tackle Loan Sharks and would urge victims, or people who know of local illegal money lenders, to go to our Loan shark victim page for further information.
Buying on credit
If you need a loan or want to apply for a credit card, it's important to make sure you get the best deal - and to be certain that you will be able to manage your debt. There is advice available, which you should consider carefully before entering into an agreement to buy goods or services on credit.
You will find advice on the Consumer Direct website and also on the Managing Money page of the DirectGov website.
It is important to consider how much the credit is going to cost you; whether you can get it cheaper elsewhere; how you will pay; whether your circumstances or the interest rate will change; and any risk to you home for "secured" loans. Secured loans are usually cheaper than unsecured loans but your home is at risk if you fail to pay.
Remember to compare the APR (Annual Percentage Rates) of different providers. All lenders must provide an APR and not any other way of calculating the interest as it allows consumers to make comparisons between lenders. Some lenders in the home lending market charge surprisingly high APR's for basic household items such as TV's or vacuum cleaners as well as what are known as 'doorstep loans'. Consider carefully whether you could obtain the items, or a loan, cheaper elsewhere.
There are three Credit Unions operating in Caerphilly County Borough Council area. Credit Unions are set up and managed on behalf of local communities and provide a low cost source of credit, a well as providing savings facilities for local people.
For further information on Credit Unions and budgeting your finances go to our Budgeting and Your Finances page.
Credit is not an automatic right. Lenders consider each application and whether they think you will be able to pay them or not. To do this they examine your 'status' with a credit reference agency. The higher your status the lower the rate of interest you are likely to be offered. Your status may depend on your age, income and whether you own your own home as well as your payment history for other loans.
If you are refused credit and feel that you have been treated unfairly you have the right to be told which credit reference agency provided the information about you. You then have the right to see a copy of your credit record held by the agency. If it is incorrect you also have the right to get it amended. Go to the Consumer Direct website for further information.
If you do get into difficulty with your agreements, and debt in general, there is help available and you should seek it as soon as possible. Advice agencies can look at your whole situation and provide free, confidential and independent advice to help you out of your difficulties. For further information on Advice agencies go to our Budgeting and Your Finances page.
Please note that Trading Standards are unable to provide any specific advice about money or debt management however you may find the Documents available on the right menu useful.