Bill of Sale Lending: Reforming a ‘Toxic’ Form of Credit

Abstract

The Bills of Sale Acts were enacted in Victorian times as a form of secured credit whereby ‘goods’ owned by a borrower could be assigned under the bill of sale to a lender who would have title to the goods transferred to him. The lender would then allow the borrower to retain possession of the goods in exchange for instalment payments with interest. In the twenty‐first century these bills are most commonly used as ‘logbook loans’ for vehicles with extortionate interest rates and very little protection for individual consumers. This article examines the operational background to the Bill of Sale Acts. It focuses upon particular concerns for consumers and businesses and provides critique of the registration process before examining the proposals and consultations for reform currently before the Law Commission.