Legal News

DIVERSITY AND INCLUSION
A REGULATORY ISSUE

Addleshaw Goddard

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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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UPSETTING THE APPLE CART
DEBT DEFERMENT: CCA/FSMA IMPLICATIONS

Locke Lord

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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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SETTLING THE MEANING OF CREDIT
CFL FINANCE LTD V GERTNER

Gateley

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

Walker Morris

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

Equivo

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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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UNDISCLOSED COMMISSION
A SOURCE OF RELIEF?

Locke Lord

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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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PLEASE MIND THE GAP
BROKER OVERSIGHT

Addleshaw Goddard

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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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HOOPS AND HURDLES
UPDATE FOR CREDITORS

Gateley

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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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LEES V. LLOYDS
COURT DISMISSES REPETITIVE DATA SUBJECT ACCESS REQUESTS

Gateley

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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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RESPONDING TO DATA BREACH CLAIMS
A COMMON SENSE APPROACH

Walker Morris LLP

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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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FORBEARANCE
TOO MUCH OF A GOOD THING?

Brodies

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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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A NEW SHERIFF IN TOWN?
CONSUMER SCOTLAND ACT 2020

Brodies LLP

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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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A DIGITAL DREAM
DOING BUSINESS AT A DISTANCE

Shoosmiths

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

Gateley Legal

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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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