CSA urges Treasury to prioritise Consumer Credit modernisation 

In a new report published today (12 July) the UK trade body for the debt collection and debt purchase industry cautiously welcomed the government’s announcement that it will reform the 1974 Consumer Credit Act.

Chris Leslie, chief executive of the CSA, warned that “we have been down this road of promises and expectations before. With the roll out of the Financial Conduct Authority’s ‘Consumer Duty’ imminent, it is more important than ever that this dated legislation is finally modernised. We would urge the future Treasury team to recognise the importance of aligning with this."

The CSA’s report entitled Modernising Consumer Protection: The Case for Reforming and Updating the Consumer Credit Act (CCA) recommended the Treasury set out a detailed consultation timetable so that changes are introduced before the end of 2023 to avoid undermining the Financial Conduct Authority’s (FCA’s) obligation to introduce a Consumer Duty.

The report also recommended reform of consumer credit communications and suggested the review looks strategically at the genuine needs of modern consumers.

Report author Henry Aitchison, head of policy at the CSA, said: “It is important that we move away from the current approach of treating all customers identically and simply grafting antiquated requirements blindly onto new iterations of regulation.

Aitchison continued: “It has been widely recognised for many years now that some post-contractual information requirements never provided the information or accuracy that consumers actually need, while at the same time managing to undermine businesses’ attempts to work with their customers.

“Slapping a bandage on already faulty requirements by suggesting yet more paperwork to explain failing regulations isn’t going to cut it, if we are serious about the Consumer Duty.”  

Leslie added: “The Credit Services Association urges new Treasury Ministers to pick up the baton of their predecessors and set out a timetable now to fulfil the legislative reform commitment. Comprehensible and joined-up consumer regulation demands nothing less.”