Features

CRUNCHING NUMBERS
PRE-EMPTIVE PLANNING FOR THE CRISIS AHEAD

Lantern

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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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THE DRIVING FACTOR
A NEW DIRECTION FOR CONSUMER CREDIT

Marsh Finance

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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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RISING TO THE OCCASION
A SUMMARY OF CCTA DEVELOPMENT PLANS

CCTA

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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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WEATHERING THE STORM
CREDIT IN A COST OF LIVING CRISIS

GAIN Credit

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

CCTA

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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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AHEAD OF THE PACK
ENSURING FIVE STAR COMPLAINT HANDLING EXCELLENCE

Aptean

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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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CCTA 2022 CONFERENCE
WRITE UP

CCTA

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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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THE FRAUD EPIDEMIC
BOOMING LEVELS OF IDENTITY FRAUD

Cifas

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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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SOLVING THE PUZZLE
BRINGING ALL THE PIECES TOGETHER

CCTA

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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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YEAR OF THE SQUEEZE
INCREASING STRAIN ON HOUSEHOLD INCOMES

Themis Consultancy

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

CCTA

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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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THE VISION
HELPING EVERYONE ACHIEVE FINANCIAL WELLBEING

The Money Charity

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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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BURNING QUESTIONS
AN INTRODUCTION TO THE OMBUDSMAN

Financial Ombudsman Service

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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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WHAT LIES AHEAD?
LOOKING TO THE FUTURE OF CONSUMER LENDING

CCTA

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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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MURKY WATERS
WHEN IS A COMPLAINT NOT A COMPLAINT?

Auxillias Ltd

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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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THE FULL MEASURE
EVIDENCING GOOD CUSTOMER OUTCOMES

GAIN Credit

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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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WATCHING WITH INTEREST
NO INTEREST LOANS: WORKABLE IN REALITY?

CCTA

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

Loan Smart

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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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STRONGER TOGETHER
MEMBER KNOWLEDGE IS OUR GREATEST ASSET

CCTA

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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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THAT SINKING FEELING
HELP FOR THOSE TRAPPED IN PROBLEM DEBT

Christians Against Poverty

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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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MESSAGE RECEIVED
FOSTERING POSITIVE RELATIONSHIPS WITH THE MEDIA

CCTA

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

TransUnion

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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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ACCESS DENIED
CUSTOMERS AT RISK OF BEING BLOCKED FROM CREDIT

CCTA

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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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IN THE PICTURE
BEING IN THE KNOW ON YOUR CUSTOMERS CIRCUMSTANCES

Aptean

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

CCTA

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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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FIRST STEPS
SM&CR: A JOB DONE?

Addleshaw Goddard

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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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THE RIGHT BALANCE
HOW EFFECTIVE ARE DIGITAL CUSTOMER JOURNEYS?

PrinSix

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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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PULLING FOCUS
TAKE A CUSTOMER CENTRIC APPROACH TO CONSUMER ISSUES

Huntswood

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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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NEW DRIVER
THE FUTURE REGULATION OF CONSUMER CREDIT

CCTA

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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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CHANGING TIMES
CREATING A NEW CCTA, BUILDING ON STRONG FOUNDATIONS

CCTA

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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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FREEZE FRAME
EXTENDED FINANCIAL RELIEF, A CONTINUING TEST

Huntswood

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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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IN THE LIGHT
REASSESSING AFFORDABILITY

Huntswood

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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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NEW HORIZON
CCTA PUBLIC AFFAIRS

CCTA

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'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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A PERCEPTION GAP
THE NEGATIVE CONNOATIONS OF ‘COMPLIANT’

Huntswood

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

Equiniti Credit Services

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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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TRANSPARENT INTELLIGENCE
THE PAYMENTS HORIZON 2020

Acquired

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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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THE RIGHT STEER
FCA REVIEW OF THE MOTOR FINANCE MARKET

Huntswood

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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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