Cycle insurance provider gives undertaking to the FCA on the fairness of a term

On 26 June 2019, the UK Financial Conduct Authority published an undertaking given by ETA Services Limited about the fairness of a term in its cycle insurance policy. The undertaking was given under the Consumer Rights Act 2015.

The FCA’s concern was over the transparency of a term allowing ETA Services Limited to reject a claim if a bicycle had not been secured using an approved lock. This term appeared to conflict with another term saying a claim would be rejected if the bicycle had been left in a communal building and not secured to an immovable object (so no mention of an approved lock).

ETA Services Limited told the FCA that since 1 April 2019, the terms had been revised so that, to be covered, a bicycle needed to be secured using an approved lock when left in communal buildings. ETA Services Limited, and the insurer, also assured the FCA that redress had been paid to consumers who had claims rejected because they did not use an approved lock in communal areas.

HM Treasury publishes response to breathing space scheme framework

In June 2019, HM Treasury published its response to the breathing space proposal.

Under the proposal, an individual will be eligible if:

– they’ve accessed debt advice;

– they’ve been assessed as being in ‘problem debt’ by a debt adviser; and

– they’ve not entered into ‘breathing space’ within the last twelve months.

Borrowers must continue to be eligible during the breathing space; this will involve a 30 day check.

The proposed definition of ‘problem debt’ includes a borrower who is having difficulty paying their debt and has sufficient difficulty that they stand a realistic chance of entering into a debt solution (for example, a debt management plan).

There will be no right for a lender to challenge whether a borrower is eligible.

The scheme will be administered using a portal (which will tell lenders when a borrower has entered, and left, a breathing space). The register will, however, be private: lenders will only be able to check other debtors.

For the period of the breathing space, a lender will not be entitled to charge interest, fees and charges. Lenders will also not be entitled to start court proceedings. And enforcement of judgments will also be paused during the breathing space.

The period for breathing space will be 60 days.

HM Treasury proposes to publish drafting regulations by the end of 2019 with a go-live date of early 2021.