Articles

a range of key articles from CCTA Magazine

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Features | 21/06/22

CRUNCHING NUMBERS
PRE-EMPTIVE PLANNING FOR THE CRISIS AHEAD

Lantern

I’ve written quite a lot recently about the cost of living crisis and how it’s set to impact consumers in general. It was also a common theme running across all the great sessions at the recent CCTA event, so I thought I’d cover some of the work we’re doing at Lantern to help our three million plus customers.

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Features | 21/06/22

THE DRIVING FACTOR
A NEW DIRECTION FOR CONSUMER CREDIT

Marsh Finance

Dear Chief Technology Officer, Did you see what I did there? Have I got your attention? This is not a letter from a regulator, but it is a call to arms and, perhaps, offers regulation of a different kind.

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Features | 20/06/22

RISING TO THE OCCASION
A SUMMARY OF CCTA DEVELOPMENT PLANS

CCTA

As many of you will know, I am the new Head of Policy and Advice at the CCTA. I had the pleasure of meeting many of our members and associates for the first time during our annual conference in Liverpool in April. The publication of this magazine presents a good opportunity for me to introduce myself to all our members and associates, and to highlight the services that fall under my remit.

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Features | 20/06/22

WEATHERING THE STORM
CREDIT IN A COST OF LIVING CRISIS

GAIN Credit

This winter will be hard. We can say that with certainty. Rising costs will impact everyone. The ‘middle classes’ may have some disposable income, and perhaps some savings. However, those already financially vulnerable will really struggle. Some will turn to credit, but will credit be there?

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Features | 20/06/22

TURNING OVER A NEW LEAF
ESG – WHY IS IT IMPORTANT?

CCTA

Increasingly members will have heard more about the importance of thinking about ESG – Environment, Social, and Governance issues. The CCTA was delighted to take part in Credit Strategy’s recent Car Finance Conference and to meet some of our members. I was asked to join some of the panel sessions and the debates. One of which was the discussion about how lenders approach ESG.

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Features | 20/06/22

AHEAD OF THE PACK
ENSURING FIVE STAR COMPLAINT HANDLING EXCELLENCE

Aptean

Today, most financial organisations have a robust complaint management process in place, but will this be enough for tomorrow? The past couple of years in particular have resulted in not only a rise in complaint numbers but an increase in customer expectations too, creating a perfect storm of complaints for financial services organisations to manage.

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Legal News | 20/06/22

THE ART AND THE SCIENCE
PART 36 OFFERS EXPLAINED

Gateley Legal

Litigation is expensive for everyone involved. It’s unsurprising, then, that the Civil Procedure Rules (“CPR”), which underpin litigation in England and Wales, contain extensive provisions encouraging and facilitating settlement, both before and after proceedings are issued. One such provision is the unique and self-contained settlement procedure contained in CPR Part 36. Settlement offers made pursuant to this Part are, inventively, called “Part 36 offers”.

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Legal News | 20/06/22

MOVING TO THE CLOUD
HORIZON SCANNING FOR FINANCIAL SERVICES FIRMS

Walker Morris LLP

Use of cloud technology in streamlining processes and enhancing the customer journey in the sale and maintenance of financial services products offers businesses obvious benefits, with the Bank of England (BoE) stating that “using the cloud allows businesses to work in a more agile way…from file sharing to managing fraud”.

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Legal News | 20/06/22

EARNING ARRESTMENT
IT’S DONE DIFFERENTLY IN SCOTLAND

Brodies LLP

This series looks at the enforcement options available to creditors to recover sums due by a debtor in Scotland. In a previous edition we looked at Inhibition which is similar to a Charging Order in England. In this edition, we now turn to look at how Earnings Arrestment operates in Scotland.

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Legal News | 20/06/22

FAIR AND SQUARE?
REGULATED AND EXEMPT LOAN AGREEMENTS

Hill Dickinson

Liverpool, the location of the 2022 CCTA conference, is also the backdrop for a recent decision on the boundary between regulated and exempt agreements, and on the ‘unfair relationship’ question.

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Features | 20/06/22

CCTA 2022 CONFERENCE
WRITE UP

CCTA

We held our first conference since before the pandemic, on the 27th April in Liverpool. Here we pick up on some of the themes and discussions from the speeches and panel sessions that made up the agenda.

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Members Only | 20/06/22

EMPOWERING CONSUMERS
THROUGH THE USE OF CREDIT TECHNOLOGY

Aryza

For UK consumers, the current economic climate continues to create challenges. As the cost-of-living increase continues to intensify, many are concerned that they will no longer be able to keep up with their regular monthly outgoings. In fact, the Office for Budget Responsibility, predicted that UK household real income in 2022 would contract at the sharpest rate since records began in the 1950s.

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Members Only | 20/06/22

DEAR CEO
ARE YOU DOING ENOUGH?

Themis Consultancy

A ‘Dear CEO’ letter is fast becoming the choice instrument of communicating with regulated firms. Such letters serve to focus the attention of a firms’ CEO and accountable senior managers on crucial issues for the FCA. On this occasion, the FCA issued a Dear CEO letter on 6th May 2022 to consumer credit firms demanding immediate action to ensure firms’ financial promotions are clear, fair and not misleading.

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Members Only | 20/06/22

NAVIGATING THE MAZE
THE IMPORTANCE OF CREDIT AND THE CONSUMER DUTY

Square 4

Inflation is biting. Food, petrol and energy bills – the essentials for many are rising at rates not seen for a generation. Many households are struggling and will continue to have to make some difficult choices through these challenging times. The demand for credit is therefore likely to rise, as is the support that existing borrowers are likely to require. As a result, the focus on the consumer credit sector from the FCA will be a key priority.

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Features | 09/02/22

THE FRAUD EPIDEMIC
BOOMING LEVELS OF IDENTITY FRAUD

Cifas

Fraud in the UK has reached epidemic levels. It’s estimated that there were 3.8 million fraud offences in England and Wales in the year ending June 2019, the scale of which was experienced by Cifas members.

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Features | 09/02/22

SOLVING THE PUZZLE
BRINGING ALL THE PIECES TOGETHER

CCTA

As 2022 gets properly gets underway, I am celebrating my first year completed in the role of Chief Executive of the CCTA. It has been an unusual year with the pandemic, but I am pleased to say that the numbers have remained strong, and we have managed to introduce a series of changes.

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Features | 09/02/22

YEAR OF THE SQUEEZE
INCREASING STRAIN ON HOUSEHOLD INCOMES

Themis Consultancy

Owing to the strains anticipated on households this coming year, 2022 has been named “the Year of the Squeeze” by the Resolution Foundation (an independent think-tank focused on improving living standards for those on low to middle incomes). This comes as no surprise as the new social care levy is applied to national insurance contributions, personal tax allowances are frozen and inflation is high. These together with soaring energy prices, with some predicting annual household energy bills rising to above £2000, is likely to mean that many borrowers, and more specifically those who are vulnerable, may be impacted.

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Features | 09/02/22

THE ODD ONE OUT?
WHAT’S BEING SAID ON BUY-NOW PAY-LATER

CCTA

The Treasury’s consultation on Buy-Now Pay-Later (BNPL) has recently closed. This consultation sought opinions about the Treasury’s plans to bring the product into regulation, following the findings from the Woolard Review, which highlighted the risk of consumer detriment. It included different policy options on how best to achieve ‘a proportionate approach to regulation of BNPL’. While the Treasury considers the responses it has received, it is interesting to see the views across different parties as they share their submissions.

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Features | 09/02/22

THE VISION
HELPING EVERYONE ACHIEVE FINANCIAL WELLBEING

The Money Charity

Wellbeing has long been a focus for many organisations in the financial sector. Wellbeing hubs can offer employees and customers a wide range of helpful support and services from exercise and nutrition to sleep and mental wellbeing. Often though, organisations have not given as much consideration to a critical piece of the jigsaw, Financial Wellbeing.

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Legal News | 09/02/22

INHIBITION
IT’S DONE DIFFERENTLY IN SCOTLAND

Brodies LLP

In the context of debt recovery litigation, the obtaining of a decree (judgment) should not be an end in itself and this is particularly true in relation to volume debt recovery litigation. The purpose of a court decree is to enable the creditor to obtain payment from his debtor of the sums of principal, interest and expenses (legal costs) due in terms of the decree. To achieve payment, either in full, or by instalments over a period of time, it is important that the creditor has a clear and defined strategy in relation to, firstly, the selection of accounts for litigation, to ensure that they are appropriate to be litigated on and, secondly, the enforcement of decrees to maximise the prospects of repayment.

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Legal News | 09/02/22

A LANDMARK JUDGMENT
LLOYD VERSUS GOOGLE LLC

Hill Dickinson

The dispute involved former director of consumer watchdog ‘Which?’, Mr Lloyd against Google LLC alleging breach of duties as data controller under the Data Protection Act 1998 (DPA). Mr Lloyd alleged that Google had been secretly tracking online activity of millions of iPhone users and had used the data for commercial purposes without the users’ knowledge/consent. He sought to bring the claim acting as representative for all individuals affected. Compensation of £750 was sought in respect of each individual, which would result in a total damages order of £3 billion if successful.

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Legal News | 09/02/22

SIGNIFICANT CHALLENGES AHEAD
REVIEW OF THE PRE-ACTION PROTOCOLS

Restons Solicitors

The start of 2022 sees the continuation of the Civil Justice Council review of the pre-action protocols (PAP), which may result in changes to the process. While some would be welcomed, others may present significant challenges to the debt collections industry. There are four key areas which are being looked at for debt claims; however, one key message should absolutely remain the same and that is to encourage engagement between the debtor and creditor (or their appointed representative). Increased engagement helps to reduce the number of claims being initiated through what is already a creaking justice system. The original debt PAP unfortunately did not have that desired effect.

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Legal News | 09/02/22

CROSSING THE WATERS
HOW TO FUND YOUR BUSINESS

Walker Morris

Lending money is what you do. Swapping your lender hat for a borrower one requires careful consideration. Navigating the various funding options available with the specialist lenders in the market is about finding the best fit for your business. And what about raising funds via issuing shares? The following sets out the pros and cons of common funding options for consumer finance businesses.

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Members Only | 09/02/22

A CULTURE OF OPENNESS
MEETING THE CHALLENGE OF THE CONSUMER DUTY

Lantern

There is quite often an assumption, that as all businesses offering financial services are regulated by the same governing body (the FCA), they’re all delivering the same level of service ... wrong! The need for the new Consumer Duty reflects that whilst there is a basic standard that is required of firms, the bar can, should and has to be raised. The FCA want “firms to be incentivised to compete in the interests of consumers." This is a competition we should all be fighting to win.

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Members Only | 09/02/22

MOVING FROM LIP SERVICE TO ACTION
TREATING VULNERABLE CUSTOMERS FAIRLY

Vulnerability Registration Service

The media has recently been flooded with government and royal scandals and, while the fuel crisis has received some airtime, the potential impact on millions of households has not received the publicity it merits. The decision of to ‘Eat or Heat’ is a very real threat to many. The negative impact on household expenditure a risk to us all.

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Members Only | 09/02/22

TEETERING ON THE EDGE?
FAIR FOR YOU PARTNERS WITH ICELAND

Fair For You

As a responsible lender focused on providing ethical credit to those unable to access mainstream credit, Fair for You hears a lot of our customers say that they are teetering on the brink of financial crisis all year round. They live in dread of unexpected bills and out of the ordinary expenses. For many, a free school meal is a crucial part of their children’s diet, often the only hot meal they get. And when the school term ends, so does that, leaving those parents needing to find a way to bridge the financial gap during the holidays and feed their families.

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Members Only | 09/02/22

NURTURING LOYALTY
ARE YOU BUILDING LOYALTY IN YOUR NEW RECRUITS?

TieTa

Covid has turned our view of the world on its head. Our sense of belonging and connection has changed significantly, our habits and routines have altered, and our appreciation of things has shifted. Businesses discovered that it’s a face-to-face transaction that generates real loyalty, customers connect with people and the impressions they make, their helpfulness, service and attitude. In contrast, the web-based world is as loyal as the service is good. Without the face of a person and someone to connect with, once something goes badly, loyalty is switched off and it's just too easy to go somewhere else.

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Members Only | 09/02/22

WHAT LIES AHEAD?
A VIEW OF POTENTIALLY WORRYING TRENDS

Data on Demand

Members will no doubt be aware of the continued focus by the FCA on the assessment of consumer vulnerability as part of their ongoing Consumer Duty consultation. They have made it clear that more is expected from lenders with a recent survey highlighting 27.7 million adults in the UK with characteristics of vulnerability such as poor health, low financial resilience or recent negative life events.

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Members Only | 09/02/22

FOREWARNED IS FOREARMED
THE IMPACT OF CONSUMER DUTY AND WHY FIRMS SHOULD ACT NOW

Huntswood

In May 2021, the Financial Conduct Authority (FCA) published its Consumer Duty Consultation paper, setting out its expectations of firms to provide higher standards of care for their consumers. We commented on this and how long firms had to prepare for changes (CCTA publication July 2021) and we now further explore what firms should be doing, and what we are already seeing in the sector in anticipation of the final policy statement expected later this year.

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Members Only | 09/02/22

WHAT NEXT?
A CLOSER LOOK AT BUY-NOW PAY-LATER

Cashflows

The payments and financial services sector has changed radically, with shifting consumer and business preferences accelerated by the Covid-19 pandemic. As we move into 2022, I expect to see further innovation and growth, in line with the huge digital shift and prioritisation of personalised consumer experiences that we have seen in 2021. While there is still uncertainty, the payments sector must leverage collective transformation efforts to align with the changing needs of the future customer.

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Features | 14/10/21

BURNING QUESTIONS
AN INTRODUCTION TO THE OMBUDSMAN

Financial Ombudsman Service

We were set up by Parliament in 2001 under the Financial Services and Markets Act (FSMA) as a free and informal alternative to the courts to resolve complaints between financial businesses and their customers. As well as FSMA, we follow the FCA’s Dispute Resolution (DISP) rules.

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Features | 14/10/21

WHAT LIES AHEAD?
LOOKING TO THE FUTURE OF CONSUMER LENDING

CCTA

Autumn is a time for discussion, and this year the impact of Covid-19 is on the agenda. One of the traditions of Autumn in the trade association world is that it is time to hold business events. We had our own Autumn Summit, while others are running workshops, conferences and roundtables. Many have returned to physical events, others remain virtual.

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Features | 14/10/21

MURKY WATERS
WHEN IS A COMPLAINT NOT A COMPLAINT?

Auxillias Ltd

When is a complaint, not a complaint? It’s a difficult area, with a number of different nuances, as shown in the recent case of Davis v Lloyds Bank PLC. This case is the first that the Court of Appeal had to consider on whether or not a dispute resolution (DISP) complaint has been made.

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Features | 14/10/21

THE FULL MEASURE
EVIDENCING GOOD CUSTOMER OUTCOMES

GAIN Credit

In its latest drive to support customers in vulnerable circumstances, the Financial Conduct Authority (FCA) wants firms to be able to evidence that vulnerable consumers experience outcomes as good as those for other consumers. The FCA launched their six Treating Customers Fairly (TCF) outcomes back in 2006. Now, the new Consumer Duty outcomes are on the horizon. The goal for the FCA has never changed, yet so many businesses fall into the trap of not fully measuring the positive outcomes we all strive to achieve.

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Features | 14/10/21

WATCHING WITH INTEREST
NO INTEREST LOANS: WORKABLE IN REALITY?

CCTA

For years there has been a policy debate about how best to support individuals that cannot afford to borrow from commercial businesses. There will always be a group of people that are considered too risky for commercial businesses to lend to, and the welfare system is designed to support this group. But there remains a discussion about how best to help them access credit to deal with essential or emergency costs.

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Features | 14/10/21

A SLOW FUSE
INFORMAL BORROWING: A TIME BOMB IN THE MAKING?

Loan Smart

Can the harm of financial exclusion ever outweigh the benefits of increased consumer protection? The short answer is: yes. There is no question that regulated lending standards have been raised under the FCA for the benefit of consumers. The non-standard lending sector has been a particular focus in recent years and there has been significant regulatory and structural change in most, if not all of the sector’s product categories.

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Legal News | 14/10/21

DIVERSITY AND INCLUSION
A REGULATORY ISSUE

Addleshaw Goddard

Diversity is by its nature diverse. When the Financial Conduct Authority (FCA) talks about diversity in financial services firms, it is referring to a broad range of backgrounds and characteristics which apply to a firms' work force and leadership, as well as the customers it serves. Through several speeches and papers published over the last year or so, the FCA has clearly indicated that diversity and inclusion are priority considerations and will remain so in the coming years.

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Legal News | 14/10/21

UPSETTING THE APPLE CART
DEBT DEFERMENT: CCA/FSMA IMPLICATIONS

Locke Lord

The Court of Appeal in CFL Finance v Laser Trust (2021) decided that the Consumer Credit Act 1974 (“CCA”) can apply to a settlement agreement, where payment of a debt by an “individual” is deferred, even if the CCA did not apply to the debt prior to the settlement, as in this case, where a loan of £3 million had been made to a company, guaranteed by Mr Gertner.

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Legal News | 14/10/21

SETTLING THE MEANING OF CREDIT
CFL FINANCE LTD V GERTNER

Gateley

Until very recently it was considered common ground that terms embodied in a settlement agreement or Tomlin Order, by which parties settle a dispute, are not subject to the CCA. However, the recent Court of Appeal case of CFL Finance Ltd v Gertner raises the possibility that some settlement agreements and/or schedules to Tomlin Orders entered into between funders and individuals might be regulated by the CCA.

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Legal News | 14/10/21

A HIDDEN COST?
COMMISSION CLAIMS AND THE DECISION IN WOOD AND PENGELLY

Walker Morris

We are seeing a growing number of claims by borrowers concerning alleged undisclosed commission payments by lenders to brokers/agents/introducers. If the borrower was not aware that commission would be paid at all, such payments may be classed as 'secret commission'. If they were aware that commission may be payable but not of the amounts, such payments may be classed as 'half secret commission'. In both scenarios, the broker and lender may face claims from the borrower.

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Legal News | 14/10/21

A TAX ON BUSINESS?
THE DOUBLE WHAMMY OF THE CIVIL COURTS

Equivo

Those using the civil courts to recover debt have faced a double whammy during 2021. Firstly, the government’s response, in March 2021, to its consultation on aligning fees for paper based and online claims, was that online discounts had fulfilled their role in persuading major users to move online and it was now unfair to distinguish between those who continued to issue on paper and those who issued online.

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Members Only | 14/10/21

FRUSTRATION NAVIGATION
PROVIDING A FRICTIONLESS SERVICE TO CUSTOMERS

Lantern

We all appreciate vulnerable customers in collections require help, but do our systems deliver that? Vulnerable customers, particularly, need to feel like they can contact third parties to discuss their situation without judgment. Let’s face it, it’s often not easy for customers to pluck up the courage to get in touch but, when they do, they really want and need slick, frictionless processes. That’s why having customer centric systems for customers and colleagues to navigate, is critical to a successful customer journey.

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Members Only | 14/10/21

A TOOL FOR EVERY JOB
SUPPORTING CUSTOMERS THROUGH FINANCIAL RECOVERY AND RESTRUCTURING

Aryza

Having recently announced the rebrand of the Debtsense suite of products, Aryza is working to develop a new range of solutions, to ensure consumers feel supported throughout the financial recovery and financial restructuring journey. Here, Karen Emmett, Head of Consumer Products at Aryza, examines the functionality of the different products within her portfolio and discusses how they’re already proving invaluable to customers.

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Members Only | 14/10/21

NOT OUT OF THE WOODS YET?
DESPITE SUMMER REPRIEVE FROM COVID IMPACT, CONSUMERS FEAR LONGER-TERM FINANCIAL RECOVERY

TransUnion

With the relaxation of lockdown, alongside hospitality and travel industries re-opening over the summer, consumers are less likely to think the pandemic has impacted their household income, according to recent research from global information and insights provider TransUnion.

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Stakeholders | 14/10/21

BREAKING DOWN BARRIERS
EXTENDING ACCESS TO CREDIT TO FUND EDUCATION

ProGrad

We are always looking for innovation and to keep members updated on how this might generate opportunities. The CCTA was interested to speak to a new company that is looking to extend access to credit to students seeking to fund their education.

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Features | 23/07/21

STRONGER TOGETHER
MEMBER KNOWLEDGE IS OUR GREATEST ASSET

CCTA

As we move into the second part of this year, I continue to use this column to provide an update on where we are with some of the changes at the Consumer Credit Trade Association as well the challenges we all face as a sector and how you can help us. You will have seen that the association continues to make changes to the way in which we work. CCTA Magazine has altered and will continue to do so with every edition. Elsewhere, communications are also being improved.

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Features | 22/07/21

THAT SINKING FEELING
HELP FOR THOSE TRAPPED IN PROBLEM DEBT

Christians Against Poverty

I don’t imagine any of us has ever been stuck in quicksand in real life. We’ve seen it in TV shows or films; the brave hero or heroine struggling to escape as they’re slowly dragged down to their doom, desperately reaching for a branch or vine to pull themselves free. This is what I imagine being in problem debt can be like, feeling helpless as your struggle to escape only seems to make things worse.

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Features | 22/07/21

MESSAGE RECEIVED
FOSTERING POSITIVE RELATIONSHIPS WITH THE MEDIA

CCTA

In the last edition of the magazine, I wrote about our political engagement. We explored why it is important to engage with the different groups and individuals that fall within that segment. While that work continues with meetings at HM Treasury and correspondence with the Financial Services Minister, this time I want to share some of our recent work around engaging with the media, another one of our key stakeholder groups.

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Features | 22/07/21

AHEAD OF THE CURVE
IMPENDING CHANGES FOR BUY NOW PAY LATER PROVIDERS

TransUnion

The buy now, pay later (BNPL) sector has been firmly in the spotlight since February this year when the Woolard Review, commissioned by the Financial Conduct Authority (FCA), highlighted the need for increased regulation in this space, to protect consumers from taking on too much debt.

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Features | 22/07/21

ACCESS DENIED
CUSTOMERS AT RISK OF BEING BLOCKED FROM CREDIT

CCTA

Thankfully we are now heading towards the end game of the Covid Epidemic fall out, as the vast majority of UK citizens will have had their two vaccinations by the end of August. At that stage the Government and business alike can take stock and evaluate the new world and whether economic and business models need tweaking, or potential wholesale change. Within the last eighteen months we have seen massive changes to consumers buying and payment methods which will have a far reaching impact going forward. Government, consumer groups and the industry should be working together to ensure that the services and delivery are appropriate, and perfectly fit the consumers' needs as the momentum to change gathers more speed.

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Features | 22/07/21

IN THE PICTURE
BEING IN THE KNOW ON YOUR CUSTOMERS CIRCUMSTANCES

Aptean

The fair treatment of vulnerable customers is a key issue for the financial services industry. The coronavirus pandemic has moved customer vulnerability further up the priority list with the Financial Conduct Authority’s guidance in the UK bringing some welcome clarity and structure to a foggy issue. So how can organisations ensure they’re treating customers fairly and dealing with every customer according to their individual needs?

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Legal News | 22/07/21

UNDISCLOSED COMMISSION
A SOURCE OF RELIEF?

Locke Lord

The failure by a broker to disclose to a borrower that the lender will be paying commission to the broker can in certain circumstances enable the borrower to unwind the loan, without having to pay interest and the lender having to pay the commission to the broker. In March 2021, the Court of Appeal lowered the bar for borrowers seeking such relief.

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Legal News | 22/07/21

PLEASE MIND THE GAP
BROKER OVERSIGHT

Addleshaw Goddard

Lenders' being subject to regulatory obligations for oversighting their credit brokers are nothing new – the OFT "Credit brokers and intermediaries guidance" in 2011 set out the expectation for lenders to take responsibility for the actions or omissions of their brokers and take reasonable steps to satisfy themselves that business associates (including brokers) weren't engaging in unfair business practices or acting unlawfully. Since the FCA became responsible for regulating consumer credit in April 2014, lenders have had obligations under CONC to oversight their brokers and ensure they have the correct permissions.

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Legal News | 22/07/21

HOOPS AND HURDLES
UPDATE FOR CREDITORS

Gateley

Over the last two years we have seen the government make a huge shift towards helping debtors manage their finances and their mental wellbeing. While this is fantastic for debtors, creditors are forced to jump through more hoops and over more hurdles to bring the cash in. This article covers a few of the changes and what creditors must do to stay compliant.

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Members Only | 22/07/21

LOOKING CLOSELY
FCA CONSULTS ON CONSUMER DUTY

Huntswood

In May, the Financial Conduct Authority (FCA) published its Consumer Duty Consultation (CP21/13), with an aim to set higher expectations for the standard of care that firms provide to consumers. These proposals will significantly raise the expectations placed on firms in terms of monitoring and increasing standards to create better customer outcomes. Naturally, responsibility for ‘accountable individuals’ will increase too.

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Members Only | 22/07/21

GOING THE EXTRA MILE
BEST PRACTICES FOR VULNERABLE CUSTOMERS

Lantern

I recently had the pleasure of hosting a Summit wholly dedicated to Vulnerability. It’s clear that vulnerability is high on the agenda for all of us, particularly with the potential debt tsunami which is threatening to arrive, but are we doing enough? To use a phrase used by one of the speakers at the event, “We need to understand more, care more and do more”.

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Members Only | 22/07/21

IN CHAINS?
BUSINESS DEVELOPMENT SHACKLED BY LIMITED ACCESS TO WORKING CAPITAL

Cashflows

During the COVID-19 pandemic, 68 percent of small and medium businesses in the UK reported a negative impact on cash flow, and, for any business where success is built on supplying funding to others, having access to working capital is crucial. Without it, finance providers are limited in the levels of business they can underwrite and could find their business development efforts shackled. Losing out on new credit and loan customers because the funding is unavailable is a tough pill to swallow at any time – but especially in the current climate when revenue and new business are hard to come by.

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Stakeholders | 22/07/21

DANGEROUS WATERS
HUNTING THE LOAN SHARKS

The Illegal Money Lending Team

The England Illegal Money Lending Team (IMLT) are a specialist unit that investigate cases, prosecutes illegal lenders and provides support for borrowers in need of assistance. What proportion of the public are able to identify an illegal money lender? It's easy to spot the clichéd characters we've all seen in films and soaps, the ones who generously offer loans only to turn nasty when a payment is overdue. They typically come in two forms, either the 1950's conman or the slick gangster. However, the IMLT can testify that illegal lenders operate in any area and can look like anyone. They will be a borrower’s best friend only for the dynamic to change rapidly when a payment is missed.

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Stakeholders | 21/07/21

BUILDING BLOCKS
COVID-19 ECONOMIC RECOERY AND CCJ DATA

Registry Trust Ltd

Registry Trust maintains the Register of Judgments, Orders, and Fines for the UK and Ireland. We hold historical and ‘live’ data on monetary County Court Judgments (CCJs), which provides a picture of indebtedness and creditworthiness at a national and regional level and can be used to inform responsible lending and borrowing, policy making, and business decisions.

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Stakeholders | 21/07/21

BOUNCE BACK?
HOUSEHOLD FINANCIAL CRUNCH CONTINUES

The Money Charity

Evidence continues to emerge demonstrating the scale of the crunch on household finances and its likely consequences. The March Budget brought welcome news of extended supports and measures, now lasting until September 2021, which will assist household’s finances as the UK moves onwards from a deeply challenging year. However, the picture of the sheer depth of issues which are forthcoming remains a concerning one.

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Members Only | 21/07/21

GUIDING LIGHT
MORTGAGE PRISONERS, WHAT STEPS CAN THE INDUSTRY TAKE TO HELP?

Aptean

In the UK, borrowers trapped in their current, more expensive mortgage who can’t re-finance for a cheaper loan have been dubbed ‘mortgage prisoners’ in recent years. The pandemic shone a spotlight on their situation. A recent report by the London School of Economics (LSE) found that those in this situation were up to 40% more likely to default on their mortgage payments.

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Members Only | 21/07/21

TREAD GENTLY
SAFEGUARD AND PROTECT: IS THIS WHAT THE FCA REALLY MEAN?

Lantern

The very clear message from the Financial Conduct Authority (FCA) in their Guidance for firms on the fair treatment of Vulnerable Customers (FG21/1) is that organisations must have good clear strategies for identifying and dealing with vulnerable customers. Customers experiencing financial vulnerability has not just been caused by the pandemic, this isn’t new, however what is new is the unprecedented circumstances we have all had to endure throughout the last year, and it’s not over yet. The economic impact of the pandemic (still not fully known) has brought vulnerability to the forefront of the FCA’s agenda, hence the expedited publication of the new guidance.

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Members Only | 21/07/21

SPACE TO BREATHE
ADAPTING SYSTEMS FOR BREATHING SPACE

Aryza Lending Solutions

Coming into force on the 4th of May 2021, The Debt Respite Scheme, otherwise known as breathing space, will impact how consumer credit lenders and debt collection agencies interact with individuals struggling to manage their debt. Here, Paul O’Sullivan, Aryza Lending Division CEO, explores what this means for lenders and how new technologies can help minimise disruption and provide greater support for consumers.

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Members Only | 21/07/21

ROAD TO RECOVERY
THE FCA’S COVID ROADMAP AND ACHIEVING THE RIGHT CUSTOMER OUTCOMES

Themis Consultancy

As we all patiently navigate the four steps of the roadmap out of lockdown, users (and providers) of personal loans, credit cards, store cards, catalogue credit, rent to own, buy now pay later, pawnbroking, motor finance and high-cost short-term credit (HCSTC), will also be on their own, often personal, journeys on the road to recovery.

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Legal News | 21/07/21

LEES V. LLOYDS
COURT DISMISSES REPETITIVE DATA SUBJECT ACCESS REQUESTS

Gateley

In the case, Lees v. Lloyds, the data subject, Mr Lees (the claimant) issued a claim against Lloyds Bank Plc (Lloyds) for failing to provide an adequate response to various Data Subject Access Requests (DSARs) in breach of the Data Protection Act 2018 (DPA 1998) and General Data Protection Regulation (GDPR).

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Legal News | 21/07/21

RESPONDING TO DATA BREACH CLAIMS
A COMMON SENSE APPROACH

Walker Morris LLP

In the run-up to GDPR, the focus was on the fines that data protection regulators can impose for infringements. Another issue that has become increasingly significant is that of data breach claims, compensation and costly group litigation. Under GDPR and the Data Protection Act 2018, individuals can claim through the courts for compensation for "material" (i.e. financial) and/or "non-material" damage, including distress and loss of control over their personal data.

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Legal News | 21/07/21

FORBEARANCE
TOO MUCH OF A GOOD THING?

Brodies

The Financial Conduct Authority (FCA) warned consumers in its Mortgages and Coronavirus: Information for Consumers Guidance of 27 January 2021 that: "If a repossession on your home is stopped and you don’t keep up with payments, the total amount you owe will increase. This is because interest will continue to be charged (plus any fees and charges you may owe according to your lender’s tariff of charges). This means you are likely to get less back later if your property is repossessed and then sold by your lender. If property prices fall in the time between now and when your property is sold, you might get less back, or even nothing, if your property is sold for less than you owe."

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Features | 21/07/21

POINTS OF VIEW
POLITICAL ENGAGEMENT: THE MAJOR PLAYERS AND CCTA PLANS

CCTA

Right now, Treasury officials are working on the Future Regulatory Framework (FRF) review. The FRF is considering how the regulatory framework for financial services needs to adapt to be fit for purpose in the future. CCTA submitted a response to a consultation on the review that recently closed. Given member struggles with the interpretation of rules between the FCA and the FOS, we thought it odd that the Financial Ombudsman Service (FOS) was not included in the review. We called for this to be reconsidered in our submission.

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Features | 21/07/21

FIRST STEPS
SM&CR: A JOB DONE?

Addleshaw Goddard

Following the introduction of the Senior Management and Certification Regime (SM&CR), to date the focus within Financial Conduct Authority (FCA) solo regulated firms has been concentrated on implementing and embedding processes within their business as BAU (Business as Usual) processes. The 31 March 2021 was a milestone date as this marked the day by which all firms must have completed their implementation of SM&CR. Does, therefore, passing this milestone date mean that you and Senior Manager Function holders (SMFs) can relax and focus on other things, especially as the flood of headlines related to SM&CR in 2019 and January 2020 has now died down?

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Features | 21/07/21

THE RIGHT BALANCE
HOW EFFECTIVE ARE DIGITAL CUSTOMER JOURNEYS?

PrinSix

The relentless drive towards digital engagement is fuelling an active debate within consumer credit about the adequacy of digital only customer journeys. They meet customers’ demand for convenience and lenders need for efficiency, but real concerns exist within the regulator and support charities that digital journeys fail to adequately detect and mitigate vulnerability risk. Are these concerns driven by a limited understanding of the digital world, or poor digital execution?

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Features | 20/07/21

PULLING FOCUS
TAKE A CUSTOMER CENTRIC APPROACH TO CONSUMER ISSUES

Huntswood

Through our proactive support of firms and our work as a Skilled Person, we have seen a substantial volume of activity arising from the FCA’s thematic focus within specific sectors of financial services. One recent area of focus has been the payday sector, with the FCA focusing largely on responsible lending and complaint handling.

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Features | 20/07/21

NEW DRIVER
THE FUTURE REGULATION OF CONSUMER CREDIT

CCTA

The regulation of consumer credit will be changing. That is the only certain thing we know. How regulation changes, or when it changes, are unknowns at this stage. We are certain that there will be changes to the regulation of consumer because: the UK has left the European Union (EU), creating both a need and an opportunity for change in areas of regulation that were driven by EU rules; the Government is working to develop the future regulatory framework (FRF); a new CEO in in place at the Financial Conduct Authority (FCA) and a major transformation programme for the organisation is underway; the recent review of the regulation of unsecured credit (the Woolard Review) made 26 recommendations for change; and there is a longstanding commitment to review the remaining provisions of the Consumer Credit Act (CCA).

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Features | 20/07/21

CHANGING TIMES
CREATING A NEW CCTA, BUILDING ON STRONG FOUNDATIONS

CCTA

I am pleased to add my welcome to this edition of our relaunched magazine. I am delighted to write as the new Chief Executive of the Consumer Credit Trade Association. My first step is to thank my predecessor, Greg Stevens, who retired at the close of 2020. As many of you know, he stepped in as Chief Executive back when the CCTA was going through some testing times.

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Features | 23/07/20

FREEZE FRAME
EXTENDED FINANCIAL RELIEF, A CONTINUING TEST

Huntswood

The global pandemic has caused operational challenges for many businesses, but the continuity of a firm’s complaints handling operation has never been more important. The latest guidance published by the Financial Conduct Authority (FCA) reminds consumer credit firms of the significance of complaints resolution at this time and confirms that it expects normal service to resume. The message is clear, prioritise vulnerable customers and take all reasonable steps to ensure complaint handling is fulfilled throughout the next stages of the pandemic.

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Features | 23/07/20

IN THE LIGHT
REASSESSING AFFORDABILITY

Huntswood

The coronavirus pandemic has hit lending at an uncomfortable time. With growth already slowing and affordability stretched, new income uncertainty is straining customers’ resilience, yet their need for credit of different varieties, is greater than ever. Against this backdrop, providing responsible lending without unreasonable risk means taking a new view of affordability, right across the lifecycle. So where should firms begin?

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Members Only | 23/07/20

WHERE THE HEART IS
THE CENTRE OF CUSTOMER EXPERIENCE

Aptean

Antony Jagger, Manager, Customer Solutions, Aptean, looks at some of the challenges associated with mobilising customer services teams in the financial services sector, and asks: “is a home working model sustainable in the long term”?

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Members Only | 23/07/20

BRIDGE THE GAP
THE MORTGAGE MARKET NEEDS TO UP ITS AUTOMATION GAME

Equiniti Credit Services

Richard Carter, Managing Director of Equiniti Credit Services, explores how adopting open technologies can help mortgage providers accelerate their digital transformation, improve customer services and boost their recovery in a post-COVID-19 world.

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Stakeholders | 23/07/20

THE NEXT LEVEL
IS YOUR COLLECTION SYSTEM READY FOR THE CHALLENGE?

Telrock Systems

We have never faced a situation that has required transition to distance collection management with agents working from home. Although most of us have lived through financial crises before and know that we need to start ‘planning for the future,’ we’re now in uncharted waters as to what to expect. The question is whether your collections systems are ready for this next challenge? Do they have the flexibility and ability to identify high risk customers needing special attention? What about at the same time meeting the majority of consumer needs and perceptions by providing an automated response, in the right medium, at the right time?

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Members Only | 23/07/20

SILOED STRANDS
COMPLIANCE AFTER COVID, THE END OF BPU?

ComplyWithMe

Have you heard of the BPU before? It stands for Business Prevention Unit, and it’s how the compliance function is seen in far too many organisations. I’m a consumer credit compliance consultant, an interim, usually. One of those people who breezes into a firm, changes everything and then goes on to the next contract, leaving someone else to carry on. I specialise in operational compliance, complaints, Quality Assurance (QA), policies, procedures etc. I think of it as Operations Assurance and I’d like to share a few insights with you.

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Legal News | 23/07/20

A NEW SHERIFF IN TOWN?
CONSUMER SCOTLAND ACT 2020

Brodies LLP

Consumer Scotland Act 2020: A New Sheriff in Town? The Consumer Scotland Act 2020 was passed by the Scottish Parliament on 6 May 2020 and received Royal Assent on 9 June 2020. The Act provides for the creation of a new consumer body to be called ‘Consumer Scotland’ which the Scottish Government intends to be ‘an unashamed champion for consumer interests and rights’ in Scotland. Business Minister, Jamie Hepburn, commented that: “Consumer Scotland will be a dedicated champion for everyone across Scotland, focused on investigating consumer harm and developing solutions to tackle it.” The Act may not yet be on the radar of businesses operating in the business to consumer sector in Scotland, but it probably should be.

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Legal News | 23/07/20

A DIGITAL DREAM
DOING BUSINESS AT A DISTANCE

Shoosmiths

Recently published figures show that the battle for new customers is tilting in favour of financial services businesses prepared to engage with their customers at a distance. One particular and instantly recognisable lender attracted most account switchers for the first time as ‘customers desert high street rivals’,

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Legal News | 23/07/20

SCHOOL’S OUT
A REAL WORLD LESSON IN PUBLIC SECTOR LEASING

Gateley Legal

The beauty of the leasing industry is that almost anything can be leased to almost anyone (subject to satisfactory credit checks). Need to finance a helicopter, sixteen dumbbells, a Volkswagen, and a deep fat fryer? Sure. There’s a finance house out there willing to talk numbers. Sole trader/limited company/partnership/plc? Not a problem. The leasing industry operates across the regulated and unregulated sectors and welcomes all. Well, almost.

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Features | 11/03/20

NEW HORIZON
CCTA PUBLIC AFFAIRS

CCTA

'Now is the time for all good men to come to the party' sounds a very sage comment, it was actually a phrase developed as a typing test by Charles E. Weller in 1867. The phrase has a modern day ring about it as we see angst, distrust, chaos, and confusion in most places, and especially in high office.

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Features | 11/03/20

A PERCEPTION GAP
THE NEGATIVE CONNOATIONS OF ‘COMPLIANT’

Huntswood

Complaints - they don't always have to cost you. If a complaint is serious and not dealt with efficiently and quickly, it will be detrimental to the business and leave the customer with a poor perception.

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Features | 11/03/20

REASONABLE STEPS
SM&CR – WHAT IS IT AND WHY DO WE NEED IT?

Equiniti Credit Services

Following the banking crisis in 2008, the Parliamentary Commission for Banking Standards (PCBS) recommended the creation of a new framework focused on increasing senior management accountability. Based on this recommendation, Parliament passed legislation in December 2013 that prompted the primary regulators of the financial services sector, the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), to implement a Senior Management and Certification Regime (SM&CR).

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Features | 11/03/20

TRANSPARENT INTELLIGENCE
THE PAYMENTS HORIZON 2020

Acquired

There is untapped value in your business…but it’s not where you expect it to be.Today more than ever before, businesses need to look to new places to unlock revenues and margin. Finding that competitive edge just gets harder.

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Features | 11/03/20

THE RIGHT STEER
FCA REVIEW OF THE MOTOR FINANCE MARKET

Huntswood

The UK has a large and active motor finance market, reported to be worth over £34bn in 2017. Considering its size, it is perhaps no surprise that the Financial Conduct Authority (FCA) decided to carry out a review of the market, assessing how motor finance products were being used, the sales processes employed by firms and whether the products could cause harm to consumers.

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Members Only | 11/03/20

CLEAR BENEFITS
MAKING THE INVISIBLE, VISIBLE

Experian

Meet the mainstream financial system, because there is little or no information available on their financial track record.

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Members Only | 11/03/20

A TIDY SHIP
FCA COMPLIANCE

Product Partnerships

The Financial Conduct Authority (FCA) continues to focus on sales practices in the motor sector, and has highlighted throughout this year the need for those involved in the financing of motor vehicles, to ensure customers can make an informed decision.

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Members Only | 11/03/20

OPEN BANKING
THREE MYTHS

Credit Kudos

Open Banking launched in the UK back in January 2018. No one disputes that the initiative opens up a host of valuable opportunities for those operating in the financial services sector. However, well over a year since its launch, many lenders are hesitant to exploit the opportunities that Open Banking presents, often due to false or outdated concerns.

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