chapter  5
51 Pages


At the end of 2003, the temperature of the consumer credit market was again taken with a view to reform, this time by a White Paper entitled Fair, Clear and Competitive.3 This reported that consumer credit was central to the UK economy (p 4) and that increased consumer credit was encouraged by record employment, low inflation and low interest rates.4 It pointed out (paras 1.7-8) that the consumer credit market (£906bn) was comprised of the following: first-charge mortgages on dwelling houses was governed by the FSA (see para 3.02) and beyond the scope of this work; but most other credit was governed by the Consumer Credit Act 1974 (CCA: see para 5.05) and included second mortgages, credit cards and other unsecured loans, mail order, hp and store cards.5 Within the category of CCA credit, there has since the enactment of the CCA been an enormous increase in credit cards (£49bn +).6 The White Paper also analysed which types of consumer tended to use which forms of credit (paras 1.28-32). Whilst the banks, finance companies and building societies dealt mainly in large advances to prosperous customers (see above), other lenders, such as check traders, moneylenders and pawnbrokers (see para 15.17), more often lent modest amounts to poor families.7 Vendor credit to poor families would typically be supplied by mail order (see para 8.19), or door-to-door traders. Developing out of the credit drapers and tallymen or ‘Scotch drapers’ of the eighteenth century,8 these businesses provided goods on credit on a

1 OFT, Consultation Document on the Working and Enforcement of the Consumer Credit Act 1974 (1993), Annex 1. See also OFT, Connected Lender Liability (1994), para 3.1, et seq.