The government has announced a review of consumer credit and personal insolvency. Consumer affairs minister Edward Davey will oversee the review with Mark Hoban, the Treasury’s financial secretary.

It will cover a number of areas, including how consumers enter into credit commitments, including the way in which credit is sold and the extent to which consumers understand what they are committing to what issues arise during the lifetime of a loan from both the consumer and the lender perspectives and what happens if things go wrong are the current insolvency solutions fit for purpose?

The Call for Evidence will be issued after the summer recess, which should lead to a consultation on specific proposals later this year or early 2011.

Davey said: “This is an opportunity not only to improve the safeguards on consumer credit products