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Evidence on logbook lending

10 February 2015

Logbook loans are a high cost form of lending which are still governed by archaic Victorian laws. They involve a consumer offering an item of their personal property (usually a car) as security for a loan they have taken. Interest rates are routinely circa 400 per cent APR which is particularly high for a secured form of lending. There has been a significant rise in the size of the logbook loan market in recent years with a 44% increase in logbook loans taken out from 2011 to 2014.

Our evidence shows us there is a particular lack of consumer protection in logbook lending including:

  • Irresponsible lending practices.
  • Aggressive and harsh debt collection practices
  • Difficulties with understanding the terms and conditions of logbook loan agreements.
  • A significant lack of protection for third party purchasers.

Citizens Advice is calling for logbook lending to be brought in line with equivalent modern consumer protection.