A step too far
Sheriff Appeal Cour: Alan King V Black Horse + Parks

Published 15 March 2023

The Sheriff Appeal Court (SAC) recently considered whether a hirer under a hire purchase agreement was entitled to rely upon his rejection of a motor vehicle when he had continued to use the vehicle after rejecting it. THE BACKGROUND Black Horse supplied Mr King with a motor vehicle under a hire purchase agreement in June 2019. In October 2020, Mr King sent an email to Black Horse claiming that the car was not of satisfactory quality and was not fit for purpose. Black Horse disagreed and Mr King commenced proceedings against Black Horse arguing that, under section 9 of the Consumer Rights Act 2015 (CRA), he was entitled to reject the car supplied to him. During the litigation in Kilmarnock Sheriff Court, the supplying dealer, Park’s (Ayr) Limited, was brought in as a third party. This was on the basis that, if Mr King was entitled to reject the car, Black Horse would have a right of relief against Park’s. However, Black Horse also argued that Mr King had continued to use the vehicle after he informed Black Horse that he wished to reject it. It was not disputed that Mr King had driven some 6,231 miles in the period October 2020 to November 2021. Black Horse moved for summary decree (judgment) on the basis that the Pursuer was barred (estopped) from rejecting the car because of his continued use of it. The court found for Black Horse and granted summary decree against Mr King. Mr King appealed to the Sheriff Appeal Court. THE APPEAL HEARING The SAC confirmed the long standing rule that a person cannot use goods after rejecting them. In quoting a case from 1898, the SAC noted that to allow a party to reject goods and then continue to use them “would be a very strange theory of law”. The CRA did nothing to change that rule. Whilst the concept of personal bar may apply in certain circumstances under the CRA, such circumstances were not present in this case. In addition, the SAC rejected Mr King’s argument that to impose personal bar on a consumer in these circumstances would impose a significant burden which would be disproportionate and would not be consistent with the CRA, which was designed to give clear and simple rules for consumer protection. The SAC refused the appeal, found that the sheriff at Kilmarnock Sheriff Court was correct to grant summary decree against Mr King, dismissed the action against Black Horse and found Mr King liable to Black Horse in the expenses of the appeal. WHAT DOES THE DECISION MEAN FOR FINANCE COMPANIES AND MOTOR RETAILERS? This is a useful decision for motor finance companies and motor retailers where the vehicle is supplied under the CRA. It confirms that the hirer or buyer cannot purport to reject a car and then continue to use it. Enquiries should be made to ascertain if a consumer is continuing to use a vehicle after seeking to reject it. It will also be interesting to see …

Experiencing technical difficulties
A consequence in the rise of online banking for creditors in Scotland

Published 15 March 2023

Many readers will be aware that a Bank arrestment is a commonly used enforcement tool in Scotland post the granting of a Decree (Judgement) for payment. It allows a creditor to secure any funds (over and above the statutory protected minimum balance) in a debtor or customer’s bank account and can be a valuable recovery option if the timing is right. Service is carried out by Sheriff Officers in person, generally at a local branch of the relevant Bank. The relevant Bank, and indeed any proposed party in whose hands it is intended to arrest funds – requires to be subject to the jurisdiction of the Scottish Courts and this was previously rarely a problem as the vast majority of Banks had branches in Scotland and jurisdiction could therefore be established. However, with the rise of the so-called online challenger Banks, a perhaps unforeseen difficulty has come to light. Such Banks provide all their facilities and services online and through apps on mobile phones and tablet devices. They have no requirement for physical branches. In the last decade or so, there has been a significant shift in how customers are using their Banks and many of the traditional High Street Banks are now reducing their branch presence, in recognition of this shift, and moving increasingly to an online service – no doubt cost reduction is also a factor. Most of the online Banks will have their registered offices outside of Scotland. So what does this mean for creditors? Given what’s been said above in relation to the requirement for a Bank in whose hands an arrestment is to be served to be subject to the jurisdiction of the Scottish Courts, this shift to online Banks is causing a problem. Where a debtor or customer banks with an online Bank and the registered office is not in Scotland, it would seem that it is not possible to serve a valid arrestment. Section 2 of the Execution of Diligence (Scotland) Act 1926 prohibits serving an arrestment by post out with Scotland. This came into force a considerable time before online banking was even thought about and is therefore not fit for modern purposes. I am aware that several sheriff officer firms are now taking steps to raise this issue with their professional body. A change will be required to legislation, and this will likely take some time to be implemented. It does however require to be addressed to ensure those pursuing debts in Scotland have the full range of enforcement options open to them.

An axe to grind?
Safeynet Credit V Impakt Claims

Published 15 March 2023

You may recall the claims management regulator was a unit of the Ministry of Justice and it regulated companies providing claims management services to England and Wales. Its regulatory responsibilities – which lie within the FCA Handbook under Conduct of Business sourcebook – passed over to the Financial Conduct Authority (FCA) on 1 April 2019, and this was recently tested in the case of SafetyNet v Impakt. SOURCEBOOK RULES The sourcebook rules dictate that before a claim is pursued against a firm on behalf of a customer, the claims management company (CMC) must take reasonable steps to investigate the existence and merits of a potential claim. It must also ensure that its customers/clients have provided their consent and the relevant authority for the CMC to represent them. THE FACTS Impakt, a CMC, was well known for raising complaints on behalf of customers against various lenders. Impakt has brought claims against lenders for providing customers with loans but had either failed to carry out adequate financial assessment of their customers or conduct proper creditworthiness checks. SafetyNet was one of the lenders Impakt pursued and brought a number of claims to SafetyNet’s door. SafetyNet stated that it had received more than 5,330 claims from Impakt and 2,871 data subject access requests and, out of those investigated, it accepted 247 claims in April 2021 due to the FOS’s eight weeks deadline in dealing with complaints. Due to time constraints, SafetyNet failed to investigate claims in-depth. Resulting in pay outs of approximately £100,000. In 2022, SafetyNet brought a claim against Impakt alleging huge losses – in the region £440,000 – due to the volume of complaints Impakt lodged with the business. This resulted in wrongful pay-outs to customers, loss of business plus the expense of training staff to manage the volume of such complaints. It also alleged that Impakt had other failings, including the failure to assess and investigate the claims properly, the fact that many of the claims that were submitted had insufficient or no oversight and some claims were lodged without the customers’ consent which led to breaches of the Conduct of Business rules. Impakt rejected these allegations. Impakt claimed that SafetyNet could have asked for an extension of time to investigate the complaints if needed, which it failed to do. It therefore claimed that it was entirely down to SatefyNet and its own procedures that inevitably caused the losses. Impakt has requested a declaration so that it can continue to pursue the outstanding claims. It has put in a claim for damages of approx. £100,000 since SafetyNet has paid out customers directly and has not received the fee share Impakt has agreed with its customers. This case is with the High Court to decide on the outcome and the result is eagerly awaited by lenders and, no doubt, CMCs. ADMINISTRATION FOR SAFETYNET However, the claimant SafetyNet went into administration on 9 January 2023. As the matter is still with the court, the company may not have sufficient funds to continue with …

An eye on the ball
Ongoing issues outside of Consumer Duty

Published 14 March 2023

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 …

Looking ahead
Third year plans with our chief executive

Published 13 March 2023

I recently received a notification on social media that I had passed my second anniversary as Chief Executive of the Consumer Credit Trade Association. It came as a little bit of a surprise as the time just seems to have flown by. Looking back, when I took over from Greg Stevens, it was important that we continued his work of advocating on behalf of our members. The CCTA’s mission for over a century has been to protect access to credit and understand the benefits that credit can deliver. Our vision has long been to ensure responsible credit for all and that has been at the heart of our conversations. I am the latest in a line of CEOs that has made that part of my mantra. We also wanted to add value, so we took the existing work of the CCTA and added new elements. Over the last two years, we have established further channels of communication. We have ongoing discussions with the Financial Conduct Authority, Financial Ombudsman Service and HM Treasury. Through these discussions, we have been able to talk about a range of issues. We have made clear that members need more information to help with the implementation of Consumer Duty. We have tried to explain the implications of the focus on affordability. There are many other issues that we have placed on the agenda. The CCTA’s mission for over a century has been to protect access to credit and understand the benefits that credit can deliver It has been interesting how during this economic downturn, the knee-jerk reaction of some is to say that we need to switch off the supply of credit. I agree that consumer credit is not always the answer. However, there are still cars that need to be bought to get people to work. Families have back-to-school costs. These are essentials and consumer credit plays its part. So, in much of our advocacy work over the last two years, we have been explaining how modern credit products can facilitate those bigger spends as well as managing cash flow. Credit is not the answer for dealing with longer-term financial issues with levels of uncertainty. It can be used to manage those temporary, expected, and unexpected peaks and troughs in finances. It can be used to buy those items that will make life easier or open up new opportunities, such as getting to a job that is not accessible through public transport. It has been interesting to make these arguments and represent CCTA members. One of the advantages of being a member of a trade association that covers some inter-connected sectors is that you can draw from the experience of one and use it in another. For example, our experience with complaints places us in a better position when the attention of claims firms move to another part of our membership. We can see some issues emerging that might be future problems for others. I confess that I need to learn and understand more of …

Challenges ahead
Debt and the cost of living: Three ‘must adopt’ strategies

Published 10 March 2023

As we enter 2023, there has been a discernible shift in the conversation around the UK’s cost-of-living crisis. Increasingly, the focus is on a subject we know all too well: household debt. From debt advice charity StepChange warning it will take years for Christmas borrowing to be repaid, to NatWest announcing it will extend the amount of time customers have to repay unsecured loans or overdrafts by six months – lenders and collection businesses are being forced to ask some tough questions. As Chris Leslie, CEO of Credit Services Association (CSA) puts it: “The squeeze on available income after accounting for essential expenditure is still set to get worse in the coming year – which in turn will raise the number of households in deficit budgets and make the collections challenge harder still.” At Lantern, we’ve been reflecting on the trends we’ve seen over the past year and how we should approach the challenges ahead. We’ve distilled these reflections into three ‘must adopt’ strategies for lenders and debt collection businesses. STRATEGY #1 (LENDERS) Improve ‘up-stream’ care of vulnerable customers Some lenders have a mixed record when it comes to effectively categorising and looking after customers who are truly vulnerable and unable to pay. The temptation has often been to offload non-performing debts to collection businesses – but in the current crisis, they should consider some tough questions around their duty of care. Sonex Financial (part of the Lantern Group) – a specialist white label service, helping lenders look after vulnerable customers in a bespoke fashion, are seeing first-hand lenders’ response to the cost-of-living crisis. According to CEO Stefan Russell: “It’s crucial for conversations to be held by the right people, who can empathise with the difficulties faced by customers in today’s climate. Having a team who understand and can relate to the challenges is important for building trust and long-term relationships with customers, to provide a caring, effective and compassionate customer service for as long as it takes”. STRATEGY #2 (COLLECTION BUSINESSES) Prepare to be flexible and patient on repayments The cost-of-living crisis has been part of our day-to-day conversations with customers for the past year. Overall, we’re not seeing significant reductions in repayments – with customers choosing to reduce spending in other areas and preferring to maintain their existing, affordable repayment plans. From Lantern’s perspective, this can be explained by the fact that many of our customers are already in vulnerable circumstances, with repayment plans forming only a small proportion of their net disposable income. These customers are naturally resilient when it comes to cutting back household spending, generally used to very tight budgeting in their day to day life. Across the wider collections industry, there are stories of fewer payments in full or settlements, as customers choose to hold back on using savings accrued during the pandemic. This is also potentially an indication of a new kind of customer experiencing debt for the first time – one that should push lenders and collectors to ask the honest question: …

Can’t see the wood for the trees?
Enhancing clarity in debt consolidation

Published 09 March 2023

Customers with existing credit (whether loans, credit cards or hire purchase deals) are frequently targeted with tempting promotions for 0% introductory deals or personal loans with lower APRs than they currently pay. Debt consolidation solutions can be hugely beneficial to some customers who struggle with their monthly debt repayments, a situation likely to worsen if the pressures on the cost-of-living increase. However, whilst consolidating debts can make monthly budgeting easier or may mean a customer pays lower APRs, these are often accompanied by a significant increase in the overall amount the customer repays. It’s not unreasonable to assume, particularly as the regulatory landscape continues to evolve, that the FCA may expect improvements in customer journeys and increased clarity in the information presented to customers. This not only includes the monetary benefits of consolidation, such as a lower monthly repayment or a lower APR, but also the salient disadvantage of how much larger a customer’s overall indebtedness may become. It would not be ‘disclosure for disclosure’s sake’, but an evolving step in helping the customer work out whether any proposed consolidation may be in their best interests. At first glance, it would be easy to assume this is a straightforward decision for a customer in problem-debt. However, they might benefit more from seeking debt-advice rather than simply re-borrowing. If the FCA’s expectations do evolve in this area, the crux is likely to be on achieving balance at all stages of the customer journey. This includes ensuring the customer is aware of the risks of consolidation whilst not being actively discouraged from something which has the potential to make monthly budgeting easier. APPROACHING LENDERS If a customer approaches a lender directly, for example when seeking an unsecured personal loan from their current account provider, it should be a reasonable expectation that the lender sets out an individual, tailored quotation, including the overall cost of servicing any new debt which the customer may enter, and how the overall cost of the new borrowing compares with the customer’s existing debt. Doing this will never be straightforward, as the lender would have to make a series of assumptions, including on the stability of future repayments a customer may make on their existing borrowing, and on the stability of future interest rates in any existing variable-rate credit products. This information, even if only illustrative, would help the customer make an informed choice about whether to enter the new borrowing to repay existing credit, retain their existing debt, or seek alternative debt-solutions. The provision of information at this level could be a future expectation from the regulator, and one which firms should consider now. Frequently, customers do not make a direct approach to a lender – at least not without having first used price-comparison platforms, eligibility-checking services, or other more traditional forms of credit brokers. By the time a customer submits a ‘final’ application (i.e. a hard-credit search in the anticipation of entering into a specific regulated credit agreement), they could have already gone through a series …

Restoring stability
Using data and insights to support vulnerable customers in the cost-of-living crisis

Published 08 March 2023

Consumers in the UK are facing increasing financial pressure amidst the rising cost of living. Inflation hit 10.1% in the twelve months to January 2022, whilst the Bank of England raising base rates to 4.0% has significantly increased the cost of borrowing money. Unsurprisingly, people are feeling the impact, with our latest Consumer Pulse study showing three quarters of UK consumers are reducing spending to help them cope, whilst nearly four in ten (39%) are building up savings to safeguard themselves. In the face of economic uncertainty, it’s crucial for credit providers to be able to better identify and serve financially vulnerable customers. And with new regulation from the FCA coming into effect this year in the form of the Consumer Duty, which aims to set higher standards of consumer protection across financial services, affordability assessments based on a robust and holistic picture of an individual’s financial situation can play a major role in helping to deliver the right outcomes. IDENTIFYING VULNERABLE CUSTOMERS Our analysis here at TransUnion suggests that 12 million consumers now spend everything they earn (with £0 disposable income at the end of the month) up from 8 million in December 2021. So, to help protect consumers and manage their customer base better, credit providers need to be taking a proactive approach to identifying financially vulnerable customers and implementing appropriate affordability checks. The view on cost of living is crucial when undertaking an affordability assessment. It’s important that affordability screening reveals not a general trend but an individual-level susceptibility to stress and economic changes, such as steeply increasing energy prices or a fixed rate mortgage ending – which will likely have a significant impact on consumers in the current financial climate. It’s also paramount that the cost of living view includes different expenditure categories, such as council tax, energy, water, media services, home insurance, car insurance, commuting and food. This can help lenders get detailed insights into a consumer’s financial position and make more informed and sustainable decisions. EMPOWERING CONSUMERS In addition, by accessing an individual’s bank account directly via Open Banking – subject to the consumer’s consent – credit providers can obtain a granular picture of income and expenditure, complementing the traditional credit reference data. This helps finance providers to make lending decisions that are tailored to the needs of each individual, whilst also simplifying the process for the consumer and reducing the need for manually providing bank statements and other documentation. Open Banking can also help with stress testing and identifying where consumers may experience an unexpected drop in income that could have a significant impact on their financial stability and ability to make repayments on their loans or credit agreements. Credit education tools, underpinned by Open Banking technology, that help consumers to understand their credit information and how it’s being used by lenders, are also a valuable support. These tools empower people to monitor and manage their financial standing and we’ve seen, with TransUnion’s solution which is used by many leading banks, that this …

Joining the dots
Considering the price and value outcome

Published 07 March 2023

The price and value of regulated financial services products has long been in the FCA’s spotlight. The Consumer Duty is strengthening the FCA’s focus in this area. While the FCA already has powers to regulate certain aspects of pricing for financial products and services, its primary focus has been around consumer protection and market integrity. With its concurrent competition objective and with its view and interpretation of consumer protection arguably widening as part of the Duty, the price and value outcome is raising the stakes. It’s clear that many within the financial services sector are struggling to gain traction with evidencing both the rationale and justification of their pricing and value strategies. Our most recent webinar in February 2023 highlighted that 60% of respondents found that the price and value outcome was the single most difficult outcome to effectively evidence. This isn’t a surprise given just how difficult it can be to firstly, define fair value and secondly, to connect all of the dots together to paint a picture as to what fair value means, given it will be a component of both financial and non-financial measures and metrics. So what do firms need to do to evaluate price and value in a Consumer Duty world? LOOKING BACK TO LOOK FORWARDS According to the FCA, price is the amount that consumers pay for a financial product or service, while value is what consumers get in return for that price. The FCA believes that many firms already consider price throughout their day-to-day business decisions, but firms have not always considered the customer as being at the heart of this ‘value’ equation. The FCA ultimately believes that financial products and services should be priced in a way that reflects their value to consumers, and that consumers should be able to understand the costs and charges associated with these products and services. The regulator has, already on several occasions stepped in to regulate on price. This has occurred, for example, where the FCA felt that market dynamics and competition were not working for particular groups of customers. For instance, within the General Insurance market, existing customers often paid a higher renewal premium compared to new customers. Furthermore, within the High-Cost Short Term credit marketplace, the FCA viewed that historic pricing was ‘excessive’, not in the best interests of customers (many of whom were potentially vulnerable), and on occasion, argued that competition was not working for customers. Looking further back, many are often quick to point to the inherent issues with PPI as a product (for example, the limited ability to claim), but the excessive commission levels (often above the 50% tipping point outlined within Plevin) and the excessive erosion of value through an elongated distribution chain all combined to force the regulators hand to action and intervention. By looking at previous precedents, we can gain an understanding as to what the regulator wishes to avoid. So, what should firms be looking to evidence to demonstrate ‘good value’? PRICE AND VALUE: THE MOST DIFFICULT …

Grasping the nettle
Identifying and supporting vulnerable customers

Published 06 March 2023

Vulnerability Registration Service (VRS) produced our Vulnerable Customer Exclusion report at the end of last year and it showed some frightening but not surprising statistics. We know from the FCA that around a quarter of the population consider themselves to be vulnerable and our report underlined that, but 10% of people deem themselves to be at risk of homelessness, eviction or repossession and 2% of people are having to turn to loan sharks. Our findings were collated before the cost-of-living crisis had hit. One of the most worrying things we’ve learnt while building VRS is how many of us are on the precipice – a risk of spiralling into unmanageable debt with no obvious route out, falling prey to unregulated lending, becoming so overwhelmed that we are unable to reach out or find the support that may be available. CCTA members already play a massive role in providing part of the safety net that sits between financial inclusion and enabling people to remain in control, rather than being caught up in a tidal wave of debt collection, enforcement, mental health impact, prepayment meters and seemingly no way out. I think many lenders are still bruised from adverse publicity five or more years ago. Headlines like ‘legal loan sharks’ and ‘toxic lending practices’ still resonate and understandably make us defensive. Are we exploiting vulnerable customers by lending to them? The reality is that vulnerable people come in many shapes and sizes and in many cases it is more than appropriate to lend to them. The alternative is to increasingly limit their options and remove that safety net. There is a big opportunity for lenders to grasp the nettle when it comes to managing vulnerable customers and, as obvious as it may sound, the key to do doing so is to accept that some of our customers are indeed vulnerable, to understand the challenges and then start to manage them. We are still a long way off from doing so and that is not sector specific. Virtually every organisation I speak to, in every sector, is grappling with (if indeed it’s high enough on their radar) how to tune their customer journey to extend the right support to their customer base. But nobody is going to come up with a magic solution – there is no master plan from government, regulators or stakeholders to address this. We need to just get on and do it because there will be regulator action, there will ultimately be fines and there will be increasing amounts of negative press and media focus. Most of all, it’s the right thing to do. We need to just get on and do it because there will be regulatory action, there will ultimately be fines and there will be increasing amounts of negative press and media focus. Most of all, it’s the right thing to do. The first step is to identify vulnerability. That is not limited to financial hardship or indebtedness – a tick in the box by doing …

FCA roundtable on Consumer Duty implementation

Published 28 February 2023

This note is a readout from a meeting we recently attended with the FCA. This will interest CCTA members who are involved in Consumer Duty implementation. INTRODUCTION As part of our policy and advocacy work, we attend the FCA’s regular roundtable meetings on Consumer Duty. These meetings, which are held specifically for Trade Associations, are a chance for the FCA to provide further detail. They could also provide insight into their expectations of firms with respect to Consumer Duty. This is an opportunity for us to put forward key questions and challenges that our members face in implementing the requirements of the duty. I attended the latest roundtable, which was held virtually, on 23rd February.  The meeting focused on the FCA’s recent review of implementation plans. They also talked about their communication and engagement activity and an update from the Financial Ombudsman Service. IMPLEMENTATION PLAN REVIEW The FCA provided an overview of their findings from the review of implementation plans for larger firms. Their findings were published on 25th January on their website. The overview they provided was effectively a summary of their published findings, where they found evidence of both good practices and areas for improvement in areas. This included Governance and oversight, Culture and people, Deliverability, Third parties, the Four Outcomes and Data strategies. They also re-iterated that where firms are falling behind on their consumer duty implementation plans, they expect firms to ensure they are continuing to focus on prioritising areas of greatest impact on consumer outcomes. Firms need to make changes to ensure consumers receive communications they understand. As well as products and services that meet their needs. They pointed out the need to work with other firms in the distribution chain to ensure all parties are delivering good outcomes. Whilst this review focused on larger firms, it is important to inform our members that the FCA will shortly be sending out a survey for smaller firms. This will be focused on their implementation plans. This is likely to be sent out “in the next couple of weeks” and will ask firms to provide responses to questions about their implementation journey. COMMUNICATION AND ENGAGEMENT The FCA was keen to highlight the work they have done with respect to industry-wide communication and engagement. They pointed to the progress made here and made reference to their Consumer Duty webpage for firms. This included sectorial webinars, and a series of podcasts focusing on each consumer outcome. As well as their sector-specific portfolio letters. It was good to hear that the communication and engagement activity will continue. They will be continuing engagement with trade associations and wider stakeholders and producing more webinars and podcasts. Two important areas for our members are that the FCA has advised they aim to issue guidance communications around the April deadline for the exchange of information between manufacturers and the distribution chain. FINANCIAL OMBUDSMAN SERVICE Richard West, the Director of Casework Policy at FOS. gave a short update. He was keen to highlight that they are …

‘The Future of Credit’ research – comments by CCTA CEO

Published 22 February 2023

Nice to be invited to the Finance and Leasing Associations dinner tomorrow, always a remarkable event. More important than the invitation to dinner is the strong collaboration between credit associations on issues that are of importance to our members. One of the common areas of work is the promotion of the value of credit to UK families and businesses. So, I was pleased to see the work being carried out by the FLA on the use of credit and especially the future of credit. I recently took part in the launch of some of their research entitled The Future of Credit. For those involved in this world, much of what it says rings a bell in terms of why people perceive, choose, and use credit. It was good to hear about what consumers want to see in the future of credit. Once again there are some familiar themes – greater personalisation, flexibility, control, and education. The research showed that most people feel that credit is working, but they could identify areas where it could be improved. There was a call for a deeper relationship with more engagement and deeper contacts, and it should be less transactional about applications and payments. That raises some interesting questions about whether a longer-term deeper relationship would be seen by the regulator as building a dependency rather than improving service. Credit is part of everyone’s lives. I also wonder whether some of these experiences and views may alter depending on your circumstances. For some, there are many products available. Others have fewer options. I believe that will mean that the relationship with credit may be very different. Lots to discuss. I know that the FLA is continuing to do more with this research, and I think it is an area where trade associations can work together.