A Missed Opportunity: CCTA responds to the findings of the Woolard Review

Updates | 02/02/21

A Missed opportunity

“While we welcome some positives within the Review findings, such as recommendations to reform credit reporting and addressing the problems within the debt management market, this a missed opportunity to explore many of the issues facing the unsecured credit market.”

“We had concerns from the outset about limited industry representation, and the review is weakest when it comes to an understanding of how the market operates now and in the future. At a time when lending is under pressure, few of these recommendations will help the diverse range of lenders that we represent. This was an opportunity to create a consumer credit market that worked well for consumers and firms.”

“Consumer credit remains crucial to many families across the UK. As we come out of the pandemic, this has never been more important. We need to get the economy back on its feet and credit will help people manage the small costs that allow them to get back to work or the more considerable expenditure on a new car or improvements to their homes.”

The same road on alternatives to high-cost credit

“The report highlights the need for alternatives to high-cost credit, but customers continue to seek out a range of products that meet their needs. The recommendations for alternatives are the same that have been tried so many times without success.”

‘Buy-now-pay-later’ an example of the bigger problem

“The fact that it has taken a review to start a process that brings the ‘buy-now pay-later’ (BNPL) firms within FCA regulation just illustrates a larger problem. The FCA should be able to act more quickly to extend the boundaries of regulation and apply clear rules for firms to follow. The development of salary finance outside the perimeter is another obvious example. It is a product that has many of the features of the old payday lending but will continue to sit outside of FCA regulation.”

Future regulation

“We support the view that the FCA needs to take a holistic approach to regulation, looking at the entire lifecycle of a credit product and the associated customer outcomes, rather than focusing in on one aspect of its use in isolation.”

Jason Wassell