The government has set out plans to tackle loan sharks who charge exorbitant rates of interest through complex and costly finance schemes in a new White Paper.

Stephen O'Brien MP shadow industry secretary said: "Any legislation should be aimed at providing a fair deal for consumers. We are concerned by the rising levels of debt and are fearful of the effects that higher interest rates could have."We would support moves to provide transparency in the consumer credit and loans industry and will be studying the White Paper to see how far it provides for this.

"But we will also be wanting to ensure that businesses do not have greater burdens placed on them to no positive effect."What the government fails to realise is that one of the best ways to reduce prices for consumers would be to halt the torrent of taxes and regulations."

Forum Response: UNIFI

Dai Davies, director of communications at UNIFI told ePolitix.com: "The finance union, welcomes the review of the credit market, and the proposal to simplify and ease the credit process. Our members are placed in the front line of customer complaints when issues arise, through no fault oftheir own.

"Many customers do want to wait around while the regulations are explained to them, but when problems arise they then blame the staff in the branch where the agreement was signed.

"Regulation on staff in the financial services sector is becoming ever greater, but the pressures on the time staff have to deal with these issuesis being squeezed by the need to serve an increasing number of customers with a reducing number of employees.

"We hope that the government will consider the time needed to explain the forms to customers and recommend to loan providers that this time is built in to any customer management process."

Forum Response: National Consumers Council

Deirdre Hutton, chairman of the National Consumer Council, said: "These measures have the potential to improve the lives of millions of people who use credit. In particular, it is a major advance on the limited impact of the current extortionate credit laws. They achieved only ten successful cases in 30 years. Even so, levels of household debt in the UK are still at record levels. Tackling the debt mountain will take more than a fairer credit framework.

"At the heart of the new regime is a new duty on lenders to treat customers fairly - an NCC idea through and through - and a major breakthrough in consumer protection. The tougher licensing regime is also welcome. Together, these measures should enable the enforcement authorities to crack down on a much wider range of undesirable business practices and exploitative credit agreements quickly and effectively.

"NCC will be monitoring closely how well the fairness tests are working. We predict that government will have no alternative but to issue guidance on interest rate caps before long. We think this will fill the hole in the proposed fairness test framework.

"The plans for a system of redress for consumer credit problems are long overdue - and should be implemented without delay, and swept into the existing financial ombudsman service. Setting up a separate credit complaints service would be too confusing for people.

"But it is vital the new regime delivers sufficient resources for the enforcement authorities and the complaints system to flex their new muscles. The promise in the white paper must not be wasted.

"That's why we will be looking closely at the new licensing regime for lenders to ensure it is capable of funding energetic and proactive enforcement action from the Office of Fair Trading (OFT) and local trading standards services. It must do far better than today's woefully inadequate system where lenders pay less than £1 a day for their licence - leaving taxpayers to stump up £1 million a week to police the system. And we want a step change in the way the OFT regulates credit - with a bite as well as a bark.

"As for the one in five denied access to mainstream lenders who are too easily exploited, the government must move more quickly to bring them more accessible and affordable alternatives. Broader-based, more sustainable funding for credit unions, improvements to the Social Fund and local partnerships with the credit industry could be part of the answer."

Forum Response: APACS

Sandra Quinn, APACS director of Corporate Communications,told ePolitix.com: "The revision of the 1974 Act is long overdue. Since 1974 the credit card market has changed beyond all recognition but unfortunately legislation has not kept pace with change. APRs provide the perfect example. Everyone wants to see APRs improved so we can better assess and compare our card products but current legislation will not support a new single, unambiguous replacement being introduced. Therefore, legislative change is vital.

APACS and its Members will need to look very carefully at the detail of every proposal outlined in today's White Paper and we look forward to continuing to work with the DTI to achieve the best results. Inevitably the devil will be in the detail and we need to examine each proposal very carefully to assess how it could impact innovation or consumer choice".

Forum Response: Consumers Association

Laurence Baxter, senior policy advisor, Consumers' Association (CA), said: "Early settlement fees - With booming debt in the UK it is very disappointing that the government has failed to put an end to early settlement fees for all borrowers. These fees put consumers off switching and tie them into expensive deals. Some providers have already abolished them. The government should force the rest of the industry to follow suit.

"APR calculation - We welcome proposals to standardise APRs but unless the way in which interest is calculated is also standardised then consumers will still not be able to compare credit and store cards. And the situation of one credit card being able to advertise the same APR as another but charge 70 per cent more will continue.

"We are particularly concerned that the government has only committed to consult industry over standardisation and transparency of interest. Consumer groups must be consulted to ensure that the solution is one that will genuinely work for consumers.

"Payment Protection Insurance - We welcome requirements for separate information and a signature for Payment Protection Insurance, but are still concerned about how this is sold.

"Credit referencing - We would like companies to provide full information to credit reference agencies, including positive data, to give the full picture of a person's credit history. This would help companies make better lending decisions and could help people switch accounts.

"We believe credit reference agencies already offer the facility to carry out credit enquiries without the search impacting on a person's ability to take out further credit. CA urges the government to skip its proposed review process and force all companies to adopt this practice immediately.

"Summary boxes - To make summary boxes truly comparable the government needs to ensure that there is standardisation of design and content."Responsible lending - Having presented some of the well known issues behind irresponsible lending, such as increasing credit limits without doing a credit search, it is disappointing that the paper makes no attempt to tackle them."