Stephen Green, Commercial Development Manager of Freedom Finance, comments:
“Recently the Office of Fair Trading issued guidance on misleading or otherwise undesirable trading names to businesses offering credit services or products. We support this move to encourage clearer and safer information and advice for consumers.
"The length and depth of the economic downturn has made the loans sector highly competitive while also increasing the number of vulnerable people looking for credit. In an attempt to attract customers, many businesses are adopting names such as ‘Cheap Loans for All’ or ‘No Interest Loans’, which can be very misleading. We would welcome any measures that would serve as an incentive for lenders and money advice services to be more upfront and transparent with applicants.
"Many consumers are also being seduced by the advertisement of low headline rates and are being rejected for these rates by lenders when it comes to application. Sadly they are not aware of the rate that is realistic to their own circumstances or that there is an entire spectrum of loan products available to them and that ‘soft search’ comparison sites are able to help them find without then making their situation worse by damaging their credit rating.
"The reality is that many people who apply will be declined for the leading rate loan and don’t know what to do next. Therefore, they find it difficult to make fully informed and realistic decisions when it comes to borrowing money. We would welcome any measures that would serve as an incentive for companies to be more upfront and transparent with applicants to help them find not only the best, but the most appropriate deal with a reputable lender.”
