Law targets loans and credit cards
Clearer advertising, better checks and more help to those in debt are among the measures being discussed
A NEW law that aims to prevent people getting into dangerous levels of debt is being debated in the National Assembly this week.
The legislation, which was passed by senators last year, is designed to put a stop to irresponsible lending and offer extra help to consumers struggling to service their debts.
It will impose extra rules on banks, loan and credit card firms, requiring them to carry out extra checks on an applicant's financial situation and put a stop to "aggressive" advertising campaigns.
There will also be tougher rules on store cards, that are offered to shoppers looking to make a big purchase on credit.
All ads must mention the interest rate charged after any promotional period ends and must include a warning line that consumers are entering into a legally binding contract and must repay what they borrow.
Applicants will have 14 days to change their mind about taking out a loan or credit card - up from seven days at present.
According to L'Express, nine million French households have access to some form of credit other than their mortgage.
Some are fixed-term loans paid off in equal installments, while others - such as credit cards - are revolving and keep amassing interest for as long as it takes the consumer to pay off.
Economy Minister Christine Lagarde said: "In the same way that there are good and bad types of cholesterol, there are good and bad types of credit. This law aims to support the good ones and eradicate the bad ones."
Almost 200,000 people last year sought help from their local commission de surendettement - departmental help groups for people in debt - up 15% on 2008.
