A look ahead at 2024

2023 was a busy year for the consumer credit sector and the CCTA. It saw the introduction of the FCA’s Consumer Duty, new research into the impact of illegal lending and further engagement with our key stakeholders- the FCA, the FOS and HM Treasury on a range of issues. Here we explore some of the developments we expect in 2024.

Proposed changes at the FOS

The FOS and its current consultation on their plans and budget will be one of our first priorities for the year at the CCTA. These proposals suggest a reduction in the case fee and levy which would be a welcome change for the sector.

The FOS is also seeking views on whether Claims Management Companies should pay a case fee for accessing the FOS system. This is a proposal that we have pushed for in recent times. That one side of a disagreement should carry all the costs in a fight between two commercial organisations is unjust. It also allows for bad behaviour and poor quality complaints without consequences. That is why we will be pushing the Ombudsman to go ahead with the proposals.

Will BNPL regulation finally arrive?

Regulation of the Buy-now Pay-later (BMPL) sector has been expected for some time. We know that regulation is on the way. With the reported use of BNPL now so high it means that this must be inevitable.

The unknowns are going to be the type of regulation and the timing. Last summer the Government suggested that BNPL might receive lighter regulation. That did not go down with consumers or other lenders wanting a level playing field.

Reform of the Consumer Credit Act

The long-awaited review of the Consumer Credit Act (CCA) is also expected. It is likely that parts of the Act will now become part of the FCA Handbook to be more flexible moving forward. We will be working on behalf of members to simplify some of the outdated parts of the Act for firms and consumers alike.

 There will be an election…at some point

We also know a General Election is coming this year. Sunak is hinting that it will likely be in the latter half of 2024.

We will be engaging with politicians across the political spectrum ahead of the election, including Labour’s shadow Treasury team to brief them on the sector. It is crucial that any new government – Conservative, Labour or some coalition – understands the importance of credit for UK families and businesses.

The Consumer Duty isn’t done

July 2023 was the implementation deadline for the Consumer Duty, but that was just the start. The next steps for the coming year are likely to focus on governance and Management Information. It will be about how you are evidencing that you are doing the right thing for the consumer.

The regulator is likely to explore several issues through the prism of the Duty. We have already seen this with value for money around bank savings rates and investment fees. A likely area of focus could be the cost of living and how lenders treat impacted consumers.

More changes from the FCA

We also know that the FCA wants to introduce Product Sales Data reporting in 2025. The initial consultation has concluded but the coming months will bring the FCA’s response and next steps for firms to prepare. Our focus will be on ensuring the measures are proportionate and don’t add unnecessary regulatory burden, especially for small firms.

All this means that 2024 is set to be another busy year. We will be advocating for members on these issues and supporting them with guidance on how to navigate these changes.