Detailed proposals for the FCA regime for consumer credit - Including PDL regulation

[Nibbler]

http://www.fca.org.uk/news/press-rel...-credit-detail

http://www.fca.org.uk/news/cp13-10-c...iled-proposals

The Financial Conduct Authority (FCA) today set out its vision for the regulation of consumer credit when it takes over from the Office of Fair Trading (OFT) on 1 April 2014.
The proposed regime will allow the FCA to provide stronger protection and better outcomes for consumers than the existing OFT regime.

There will also be tougher requirements for payday lenders, including a mandatory affordability check on borrowers, limiting the number of loan roll-overs to two, and restricting (to two) the number of times a continuous payment authority (CPA) can be used. There will also be tighter restrictions on what payday lenders can say in adverts, while the FCA will be able to ban any that are misleading.


FCA regulation will apply to any firm or individual offering credit cards and personal loans, selling goods or services on credit, offering goods for hire, or providing debt counselling or debt adjusting services to consumers.

[teaboy2]

Re: Detailed proposals for the FCA regime for consumer credit - Including PDL regulat

Well i certainly support the limits on the use of CPA to 2 requests and a ban on attempts to take part payments, which result in consumers last few pounds being taken with nothing. Not to mention money paid in being wiped out of the account leaving them with nothing to live off as well and off course all the £12 (or higher) charges being applied to the consumers loan account for each failed CPA attempt which can be numerous per week - Its this issue, along with aggressive and unlawful debt collection practices and constant roll overs, that has been the main course of the problems and not the actual interest rate associated with the loan.

[Guest]

Re: Detailed proposals for the FCA regime for consumer credit - Including PDL regulat

A few issues here.
They mention introducing a 14 day" cooling off period", not sure what they mean about this, we are entitled to a cancellation period under the distance marketing regs of course, but we are still due any charges and interest incurred in that 14 days, and most of the loans are only over 30 days anyway. I cant see the loan company offering an interest free loan for 14 days, so perhaps this has not be properly thought out.

No interest rate cap yet, WHY, surely this is one of the main areas that needs addressing.

Also, I would like to know if these new measures are individually actionable and what sanctions the creditor suffers should he transgress. Is this going to be as toothless as the CPUTR or indeed the OFT guidelines. Where the body will not even consider acting on individual complaints.

[Amethyst]

Re: Detailed proposals for the FCA regime for consumer credit - Including PDL regulat

I've added this to the Consultations area under Campaigns if anyone is interested in getting involved in responding to the consultation.

[Nibbler]

Re: Detailed proposals for the FCA regime for consumer credit - Including PDL regulat

I will try, but often get sidetracked and end up not sending the things. :o

[Guest]

Re: Detailed proposals for the FCA regime for consumer credit - Including PDL regulat

I will be returning the consultation, (for what good it may do) on behalf of my CU.

[EXC]

Re: Detailed proposals for the FCA regime for consumer credit - Including PDL regulat

No interest rate cap yet, WHY, surely this is one of the main areas that needs addressing.

I'm not sure it is the main issue, I think it comes after roll overs and continuous payment authorities.

An interest rate cap would require primary legislation for which there is a private members bill going through Parliament.

I believe that most states in the US have interest rate caps for payday loans.

[Nibbler]

Re: Detailed proposals for the FCA regime for consumer credit - Including PDL regulat

FCA already have the power to cap charges and interest.

The "High Cost Credit Bill" seeks to force the FCA into using those powers, whereas at the moment they are optional and they are sitting on their hands.

[Guest]

Re: Detailed proposals for the FCA regime for consumer credit - Including PDL regulat

I'm not sure it is the main issue, I think it comes after roll overs and continuous payment authorities.

An interest rate cap would require primary legislation for which there is a private members bill going through Parliament.

I believe that most states in the US have interest rate caps for payday loans.

Main issue as far as many of us are concerned,
Yes most US states do, and also Canada. There are also additional measures to ensure that applicants do not submit multiple applications in Canada, in the form of a central database which creditors must use.

[EXC]

Re: Detailed proposals for the FCA regime for consumer credit - Including PDL regulat

FCA already have the power to cap charges and interest.

The "High Cost Credit Bill" seeks to force the FCA into using those powers, whereas at the moment they are optional and they are sitting on their hands.

Yes you're right - they have price control powers. Maybe they're waiting for the conclusion of the Competition Commission enquiry.

[Guest]

Re: Detailed proposals for the FCA regime for consumer credit - Including PDL regulat

The High Cost Credit bill is still on its second reading I think, it has yet to be enacted

http://services.parliament.uk/bills/...ostcredit.html

[Guest]

Re: Detailed proposals for the FCA regime for consumer credit - Including PDL regulat

Hmm

Casework

Consumers who have concerns about terms that appear in their financial services contracts can refer those concerns to us. We also receive referrals from other sources, such as the Office of Fair Trading, Trading Standards institute, financial advisors and firms.
We consider every referral we receive, but we will not necessarily take action in every case. This is because we use a risk-based and proportionate approach in our work to decide whether to pursue a particular matter. This means that we look at factors such as the number of consumers who may be affected by an unfair term. We also consider the risk of potential or actual detriment to consumers before deciding whether it is a proportionate use of our resources to continue with the referral.
If we decide not to proceed with a referral, we will give reasons for our decision. It may be that we decide not to proceed because the level of risk is low or that the referral does not actually concern an unfair term. However, we may still consider that there is an issue that needs to be addressed by another part of the FCA and we may refer the matter to the firm’s supervisor or another department within the FCA. In addition, our views do not affect a consumer’s right to take any further action themselves, as only a court can ultimately determine whether or not a term is unfair.
If we decide to proceed with a referral, we will write to the firm in question expressing our concerns about the potential unfairness of the contract term in question. We will give the firm the opportunity to provide comments on why they believe the term is fair. If, after having received and considered the firm's comments, we remain of the view that the term is unfair under the Regulations, we will usually ask the firm to undertake to amend the term, or to stop using it in new contracts and to stop relying on it in existing contracts.
If the firm declines to give an undertaking to this effect, or gives an undertaking but then fails to follow it, we will consider whether to apply to a court for an injunction against the firm to prevent it from relying on the term.

[labman]

Re: Detailed proposals for the FCA regime for consumer credit - Including PDL regulat

Anyone wanting to keep totally up to date with this, or feed into the consulatation paper, you can sign up for regular email alerts below. I find them really good. Make up a company name (RB Consulting or whatever, NOT a Ltd company) and position in it and they'll send them to you. Although I get them sent to an official email account, I've done the latter as well for a personal email account!

http://www.fca.org.uk/firms/firm-typ...-credit-emails