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Also from the Credit Today forum. So they don't like it when they get told what to do, eh?
‘More unwelcome regulation’ for creditors - 18/04/2008
Creditors in the UK face new uncertainties following the European Union (EU) Council’s approval of the European Consumer Credit Directive (CCD) last week, according to experts.
The decision to adopt the directive, which has been mulled over for the last five years, means that the CCD will be made law in the UK by 2010, bringing "more unwelcome regulation" and potential conflict with existing legislation, they have said.
"I can’t see how this directive won’t have a huge impact," said Alison Gaines, a partner at law firm Salans in London. "BERR who will be responsible for implementation will have to significantly change a large proportion of our legislation."
One of the provisions included in the CCD is the new right of withdrawal, which allows a 14-day 'cooling off' period during which a customer would be able to cancel any credit agreement, except for overdrafts.
"This has been very controversial," she said. "It will create a big problem with point of sale finance agreements and currently, most agreements under the Consumer Credit Act (CCA) are not cancellable, which may give rise to conflict."
She added that advertising provisions may also cause confusion for creditors. Under the CCD, regulations only apply to credit adverts which include an interest rate or figure relating to cost of credit whereas the CCA covers a much broader spectrum of ads.
Amanda Hulme, credit law specialist at Addleshaw Goddard (Cabot set this lot on me last year), said that following major changes four years ago, the rules for early settlement discounts on all fixed term agreements will be changed yet again in line with the CCD.
"BERR has a lot of thinking to do on the directive. The credit industry will need to lobby hard," she said.
The CCD will apply to all credit agreements across the EU from €200 (£161) to €75,000 (£60,368), with certain exemptions.
Creditors in the UK face new uncertainties following the European Union (EU) Council’s approval of the European Consumer Credit Directive (CCD) last week, according to experts.
The decision to adopt the directive, which has been mulled over for the last five years, means that the CCD will be made law in the UK by 2010, bringing "more unwelcome regulation" and potential conflict with existing legislation, they have said.
"I can’t see how this directive won’t have a huge impact," said Alison Gaines, a partner at law firm Salans in London. "BERR who will be responsible for implementation will have to significantly change a large proportion of our legislation."
One of the provisions included in the CCD is the new right of withdrawal, which allows a 14-day 'cooling off' period during which a customer would be able to cancel any credit agreement, except for overdrafts.
"This has been very controversial," she said. "It will create a big problem with point of sale finance agreements and currently, most agreements under the Consumer Credit Act (CCA) are not cancellable, which may give rise to conflict."
She added that advertising provisions may also cause confusion for creditors. Under the CCD, regulations only apply to credit adverts which include an interest rate or figure relating to cost of credit whereas the CCA covers a much broader spectrum of ads.
Amanda Hulme, credit law specialist at Addleshaw Goddard (Cabot set this lot on me last year), said that following major changes four years ago, the rules for early settlement discounts on all fixed term agreements will be changed yet again in line with the CCD.
"BERR has a lot of thinking to do on the directive. The credit industry will need to lobby hard," she said.
The CCD will apply to all credit agreements across the EU from €200 (£161) to €75,000 (£60,368), with certain exemptions.
