The Association of British Credit Unions, (ABCUL) have thrown their support behind a campaign to introduce regulations to clean up the act of certain loan companies.
The Office of Fair Trading (OFT) have announced plans to shut down any company found to be taking payment up front for loans they never intend on arranging.
The OFT have made the decision after a complaint from the Citizens Advice charity which highlighted the number of customers being asked for upfront payments when applying for loans.
The OFT has called on the Government to introduce new legislation making the charging of a fee illegal, if a loan is not arranged.
The problem has stemmed around businesses who have targeted those in financial difficulties, and have levied unfair charges with the promise of getting them a loan, that will help their finances in the long run.
Mark Lyonette, chief executive of ABCUL added, “We’re very pleased to see the OFT taking action against some of the most unscrupulous practices in the credit brokerage industry.”
ABCUL are well known for their work with the Post Office, and the part they have played in the struggling businesses revival.