Consumer Credit Act consultation published

The Consumer Credit Act (CCA) governs the regulation surrounding billions of credit card purchases, personal loans and consumer hire agreements made by UK consumers every year.

The government’s intention with this reform is to inject innovation into the credit sector and increase accessibility of credit products for all consumers, thereby growing the economy at a point where are in a recession.

The government will also no doubt take the opportunity to bolster existing consumer protections, ensuring customers remain protected in a precarious and ever shifting economic landscape.

The consultation published today is the primary stage of the reform legislation and asks stakeholders for input on its strategic direction.

It also asks questions about how the consumer credit regulatory environment could be changed to ensure optimal performance of regulation surrounding customer communications, consumer protections and sanctions for firms that do not adhere to regulatory standards. Further questions cover how this reform should approach the accessibility of credit and financial inclusion.

The government invites input from stakeholders by 17 March 2023.

Commenting on the Reform of the Consumer Credit Act consultation, published today by Government, Stephen Haddrill, director general of the finance & leasing association, said: “The Consumer Credit Act was written back in the 1970s, and subsequent updates have merely nibbled the edge of what needed to be changed.

“We therefore welcome today’s announcement as the first stage of what must be comprehensive reform. For too long, consumers and lenders have had to deal with archaic language, complicated processes and rigid structure.

“We need a modern regime that protects consumers, facilitates innovation and is futureproofed to grow and adapt with the industry.

“The Government recognise the important role that credit plays in the economy, so we look forward to working with them to improve the regulation that underpins billions of transactions each year in the UK.”