MPs recently affirmed that a strict action has not been taken by the Office of Fair Trading despite the fact that the credit market's shabby end was costing borrowers some £450m each year.

It is being said that the OFT has proved ineffective as well as apprehensive in the extreme when it comes to fighting the problems. The Public Accounts Committee's chair, Margaret Hodge, said that a few of the lenders made use of predatory techniques so as to target vulnerable people on low incomes.

They, thus, encouraged them to pull out loans that turn into out of control debts when upturned with extra interest. Borrowers, therefore, face huge costs each year.

However, the regulator claimed that strong action had been taken by it so as to ensure protection of consumers. But, the existing legislation constrained it in what it could do.

The requirement to show the annual percentage rate (APR) of interest on credit was called for by the MPs so that it could be replaced by a clearer statement of the whole sum repayable on the loan. Since, consumers would be helped in understanding and comparing different products.

"We will be expecting the OFT to show that this marks the start of a genuine step up from the inadequate approach that was evident at our hearing", stated Mrs. Hodge.