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Our response to the FCA interim report of CCA review

Our response to the FCA’s interim report of the review of the Consumer Credit Act

Following the establishment of the present regulatory framework for consumer credit and the Financial Conduct Authority through the Financial Services Act 2012, the government created a requirement for the FCA to review the remaining provisions of the Consumer Credit Act 1974 that had not been subsumed into FCA rules.

This includes, for example, a number of rights and protections (such as the ‘connect lender liability’ that makes credit card lenders jointly responsible for the goods purchased using a card), requirements for creditors to provide customers with certain information and sanctions for failing to comply with these requirements. The FCA must make recommendations to the Treasury by April 2019.

In its interim report, the FCA proposes that a number of provisions of the Consumer Credit Act could be incorporated into FCA rules without unduly affecting consumer protection, primarily a number of requirements for firms to supply customers with specified information.

However, the FCA has also concluded that most rights and protections, and the associated sanctions, could not be incorporated into the FCA rulebook from the Act without reducing protections for consumers.

We are broadly reassured by the proposed approach the FCA has set out. However, we've asked the FCA to consider next steps carefully: the changes it proposes can only work well for consumers if they are taken forward in a measured, inclusive way.

We recommend that the FCA:

  • Builds a ‘test and learn’ principle into its approach to incorporating information requirements into its rulebook, drawing particularly on insight gained from behavioural science
  • Looks particularly at opportunities to update and extend the connected lender liability provisions in the Consumer Credit Act and whether there may be opportunities to create a more flexible framework for the modification of credit agreements to help consumers avoid problem debt
  • Considers carefully how the relationship between sanctions in the Consumer Credit Act and information requirements transferred to the FCA rulebook will work in future to ensure that the standard of information provided to consumers by firms is improved rather than lowered

Download our response to read our full recommendations.

Download our Consumer Credit Act response

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Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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