As both a finance professional and a conscientious consumer, I am deeply concerned about the prevalence of "bait-and-switch" APR (Annual Percentage Rate) tactics in the lending industry. The financial integrity of transactions is of utmost importance to me, and the use of misleading practices that lead individuals to make sub-optimal and often detrimental decisions is both unethical and outdated. In the current lending marketplace, it is common for lenders to offer seemingly attractive interest rates, only to alter them after a hard credit search has been conducted. This leaves borrowers with little option but to accept the higher rates or face further credit inquiries that could damage their creditworthiness.

Every year, thousands of consumers apply for loans, credit cards and other finance products after being shown an attractive "representative APR". However, many only discover the actual interest rate they are being offered after the lender has performed a hard credit search against their credit file.

This process is fundamentally unfair.

A hard credit search is not without consequence. Multiple hard searches in a short period may affect a consumer's credit profile and can discourage them from continuing to compare lenders. As a result, once a hard search has been recorded, many applicants feel pressured to accept a significantly less favourable offer than the one that encouraged them to apply in the first place.

Consumers are effectively presented with two poor choices:

Accept a loan at a substantially higher interest rate than expected; or
Decline the offer and make further applications elsewhere, potentially accumulating additional hard credit searches while trying to secure a better deal.
This undermines genuine competition between lenders and weakens consumers' ability to make informed financial decisions. A lending decision should be based on transparent, agreed terms, not on a process that makes it increasingly costly for applicants to continue shopping around.

Modern credit assessment technology already allows lenders to perform sophisticated affordability and eligibility checks using soft searches. There is no compelling consumer benefit in delaying the final pricing decision until after a hard credit search has been recorded.

We therefore call upon the UK Government, HM Treasury and the Financial Conduct Authority (FCA) to introduce regulations requiring that:

Lenders must determine and disclose the final APR and all material lending terms before carrying out a hard credit search.
A hard credit search may only be undertaken after the applicant has reviewed and accepted those final terms.
Where a lender cannot determine final pricing without additional information, only soft credit searches should be used until the offer is finalised and accepted.
A lender should not be permitted to use a hard credit search as part of a process that results in materially different lending terms from those presented immediately prior to the application.
This proposal does not prevent lenders from assessing risk or offering different rates to different borrowers. Rather, it ensures that consumers know exactly what they are agreeing to before a hard credit search is recorded, preserving their freedom to compare competing offers without unnecessary damage to their credit profile.

Consumers deserve a lending market built on transparency, informed consent and fair competition. Hard credit searches should be used to complete an agreed lending decision, not as leverage that limits a consumer's ability to seek a better offer elsewhere.

Sign this petition if you believe lenders should be required to finalise and honour their loan terms before a hard credit search is recorded.