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Response to HM Treasury consultation on Goods Mortgages Bill

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The law on bills of sale needs wholesale reform

As the largest specialist debt advice charity helping people across the UK, our clients have first-hand experience of the detriment caused by the antiquated and inadequate consumer protection governing logbook loans.

Overall we support the approach as set out in the draft Goods Mortgages Bill. We consider that this new legislation should go a considerable way to addressing the consumer detriment experienced by logbook loan borrowers. However, we have three main and significant concerns with the bill as it is currently drafted:

  • We are concerned that the opt-in procedure will weaken consumer protection
  • We recommend stronger protection built into the legislation that specifies what the court can do to protect logbook loan borrowers
  • The bill allows lenders to repossess the goods without a court order or consent if the borrower has repaid less than a third of the secured sum

We are concerned that potentially vulnerable logbook loan borrowers will not be afforded modern consumer protection from this Bill as it is currently drafted with the opt-in procedure and exemption from the court powers to suspend possession of goods.

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Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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