A local MP has slammed Government inaction over centuries-old laws which have led to car owners being harassed for loan debts.
Makerfield parliamentary representative said it was “baffling” that ministers had not followed through on promises to act against logbook loans.
The issue was brought up yesterday afternoon in a Westminster Hall debate when a member of the Government had to respond to Ms Fovargue.
Logbook loans involve people borrowing money while using a car as security, which is then repossessed if payments are not kept up.
Critics say repayments are steep and lenders do not even need a court order to take a vehicle.
Worse, Ms Fovargue’s office said the debt transfers with the car, so people have unwittingly paid for a new vehicle and then found themselves being aggressively chased for the previous owner’s owings.
Ms Fovargue, who also chairs the all-party parliamentary group on debt and personal finance and worked at the Citizens Advice Bureau before entering Parliament, accused the
Government of needlessly prolonging the issue and called for action to be taken now.
Ministers have suggested that reforms to the sector first need to be considered by the Financial Conduct Authority (FCA).
She said: “For reasons that are frankly baffling, the Government has gone back on its promise to reform logbook loans in this session of Parliament.
“These are loans which people take out using their cars as security. Not only are the repayments high, but if one payment is missed the lender can take immediately repossess the car without a court order.
“They can even repossess the car if it has been sold on to an innocent third party!
“Everybody agrees that this is outdated Victorian law has no place in the 21st century.
“But ministers are now saying the matter should be looked at by the financial regulator, the FCA.
“This looks like a kick into the long grass.
“Not only does the FCA lack some of the powers needed to deliver the kind of protections consumers need, but we already have a Bill – drafted by the Law Commission – all ready to go.
“I have put this to the minister this afternoon.
“I want to know why this long-overdue bill is being shelved and what the FCA can do in the meantime to help vulnerable people who have fallen foul of unscrupulous logbook lenders.”