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Money Advice Trust comments on FCA’s action on credit brokers

The Financial Conduct Authority (FCA) has today announced new requirements for credit brokers to protect consumers from harmful business practices in this market.
 
Joanna Elson, chief executive of the Money Advice Trust, the charity than runs National Debtline, commented:
 
“Up to now credit brokers have been something of an invisible industry, and confusion has reigned in this market.  Too many brokers have been getting away with giving the impression that they are lenders themselves, rather than merely middlemen who charge high fees for a service of questionable value.
 
“The FCA is right to crack down on these companies, many of which have been treating borrowers unfairly.  We remain concerned, however, over credit brokers’ fundamental business model, which can see borrowers charged a fee even in cases where no loan is arranged. 
 
“The regulator should also look at the sale of customer data between firms without clear customer consent, which is another area of bad practice in this market.”
 
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