Nigel Griffiths, UK consumer affairs minister, has published a consultation paper – sent to the credit industry and consumer bodies – aimed at clarifying and simplifying British consumer credit law. Several recommendations relate to advertising, including:
the advertising of an Annual Percentage Rate (APR) for mortgages aimed at people with low incomes should “reflect the total charge for credit over the full period of the loan and not just the initial discounted period”
advertisements on radio, TV and in the cinema aimed at encouraging people to seek credit should include warnings about the risks associated with failing to make the required repayments on a loan secured against a home
advertisements for so-called ‘equity release’ schemes (under which loans are advanced in exchange for some of the equity of a home) are seen by the minister “as inappropriate and misleading” if they inform consumers about the risk of losing the home “when for the majority of schemes this is not a risk. What they really need to be warned about is ensuring the income from the scheme will be sufficient to meet their present and envisaged future needs”.
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