AN EYE ON THE BALL
ONGOING ISSUES OUTSIDE OF THE CONSUMER DUTY

CCTA

There is no doubt that Consumer Duty has been our primary focus for over a year now, and you will have heard about the activities, events, and engagements we are carrying out to support our members with the Duty. However, I want to move away from this for now and update our members on other key regulatory and legislative matters that we have also been progressing.

As your trade association, we continue to focus on issues and concerns which are important to our members. Over the course of last year, and as we move forward in 2023, we have continued to address some reoccurring matters, as well as new ones.

One of those matters is Claims Management Companies (CMCs). Members have long been frustrated with certain CMC practices and tactics. As such, we have provided support and guidance in this regard. You should have seen a number of updates and communications on this topic from the CCTA. Your experiences and input have been vital in our dialogue with the FCA.

I want to move away from (the Consumer Duty) for now and update our members on other key regulatory and legislative matters that we have also been processing.

They have helped us raise our concerns about some CMCs, and consequently, we were pleased to see that the FCA recently issued a Portfolio Letter to CMC firms, highlighting some of the concerns we have been raising.

So, continue to speak to us about what you are seeing and experiencing with CMCs. We know that, like us, many members were frustrated to hear that the Financial Ombudsman Service (FOS) decided that they would not be looking into charging CMCs for the use of FOS services. Despite this, we have continued our push in this regard in face-to-face meetings with them. It is somewhat of a relief that they have agreed that they will not completely close this matter for now.

Another key topic that has opened up dialogue across the financial services industry is the reform of the Consumer Credit Act 1974. Through our usual communication channels, members will be aware that the government launched the first consultation at the end of 2022.

Although legislative change may take years, the consultation asks for initial arguments for and against moving some provisions into regulation and retaining other provisions under the legislation.

We are working closely with our legal associates to fully understand all the operational, cost, and benefit (or adverse) impacts of the proposals for members. In formulating our response, we are working to ensure that any reform is appropriate, less burdensome, and less complex for both consumers and businesses.

Members are encouraged to get in contact as we are keen to hear your initial thoughts on the proposals.

At this point, I would like to move on to an area that affects us all, the cost-of-living crisis. Inflation and economic uncertainty continue to add strain on individuals and families everywhere. Through dialogue with many of our members across all sectors, we know that you have all been working hard to ensure customers are appropriately supported throughout the crisis.

We want to continue to guide members so they can support their customers, especially those with characteristics of vulnerability.

At our recent virtual Summit, we asked associate member TransUnion to provide an updated insight into the cost-of-living crisis and what this means for our sector and your customers. I know that members are also keen to continue supporting vulnerable customers which is why we asked the Vulnerability Registration Service (VRS) to speak and provide their recent experience and insight.

As I mentioned earlier, the cost of living affects us all, businesses as well as consumers. One area where some of our members’ businesses are affected by increasing costs is where firms are required to use the Proxy Measure Fee calculation for their regulatory fees. Proxy Measure Fees are used by brokers or intermediaries who use third-party credit providers to finance the sale of their goods/services, yet do not earn commissions from such credit broking activity. Since its inception, the Proxy Measure Fee calculation has been linked to the Bank of England base rate.

Due to recent increases in the Bank’s base rate, regulatory fees for such brokers and intermediaries have seen a sharp increase. We are working with the FCA to address the inequalities of this measure and will provide updates to our members where possible. If you are a member that uses this method for your regulatory fees, please do get in contact and share your issues or concerns.

Naturally, as your trade association, we are involved in many other areas of policy and advocacy work to support the membership, and we will provide updates via our usual channels as we go through 2023. However, feel free to contact your CCTA team to raise or discuss any matters which are important to you.