Apr 01, 2013 Simon Williams
In recent years, many individuals across the globe have experienced financial difficulties since the start of the worldwide recession. People have been laid off in droves, experienced massive pay cuts and have had to contend with rising prices because of inflation, all the while making ends meet and supporting themselves and their families.
However, with these challenges also came a large issue for many - because of the strained financial landscape, many people took on debt they weren't able to pay off, resulting in hits to their consumer credit reports. So, to be able to pay their bills on time and keep a roof over their heads and food on the table, some turned to lenders. But again, because of the less-than-optimal fiscal situation, many companies and banks weren't doling out money to anyone other than those who had perfect credit scores.
As a result, a number of people looked to alternative finance companies for relief. These types of businesses tend to judge loan applications on a variety of factors, not just the traditional methods. For instance, many are using the Payment Reporting Builds Credit strategy these days. This tactic compiles a score based on a number of elements, including a person's ability to repay utility bills on time, and can provide a much more comprehensive financial profile.
But, perhaps because these options have become so popular in the United Kingdom, lawmakers are making numerous changes to the industry. Not only do consumers have to be aware of the tweaks, but lenders must ensure they're compliant at all times or risk a shutdown.
According to The Guardian, short term lenders will soon have to follow a number of new laws when advertising to consumers. While the newspaper said that a proposed cap on such financial options was shot down by Parliament, the same cannot be said about proposed promotional restrictions.
Among the new clauses are stipulations against including a "wealth warning" on ads, limits on how often companies can market their services and the mandatory inclusion of annual percentage rates on any advertisements.
Stick to the law
The majority of lenders follow the law completely, but mistakes do happen. However, because government leaders recently announced an increased focus on making sure all companies are compliant, these businesses need to remain vigilant and might think of increasing the training of new employees to make sure no flubs are made by accident, the Oldham Evening Chronicle reported.
The source said that police, councilors and trading standards officers have joined forces with the Illegal Money Lending Team to ensure the letter of the law is being vigilantly observed.