Month: April 2021

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FCA publishes website reminding consumer credit firms of Brexit changes

On 13 April 2021, the UK Financial Conduct Authority published a webpage reminding consumer credit firms that:

– Brexit changes to pre-contractual information (a final ‘au revoir’ to the SECCI and ECCI!); and

– information for firms subject to CONC 2.7.2R(4)(a),

must be implemented by 31 May 2021.

The end of the transitional provisions mean the post-Brexit disclosures must be used from 1 June 2021.

If pre-contractual information (formerly the SECCI or ECCI) disclosed under Section 55(1) of the Consumer Credit Act 1974 is non-compliant then the agreement is unenforceable without the Court’s permission (see Sections 55(2) and Section 127(1)(za) of the Consumer Credit Act 1974).

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FCA publishes extended finalised guidance: ‘Cancellations and refunds: Helping consumers with rights and routes to refunds’

On 1 April 2021, the UK Financial Conduct Authority published a press release and extended finalised guidance (aimed mainly at insurance providers, and credit and debit card providers) on helping consumers with rights and routes to refunds.

The FCA had published finalised guidance in October 2020, but this was due to lapse on 2 April 2021. The extended finalised guidance takes effect from 2 April 2021 and, unlike the earlier guidance, “remains in place during the exceptional circumstances arising out of Covid-19 until varied or revoked”.

The guidance for credit card and debt card providers says:

– The FCA expects credit and debit card providers to handle section 75 and chargeback claims “in a reasonable timescale”, and FCA reminds firms of their obligations to treat customers fairly.

– If there are delays in processing claims, the FCA expects firms to clearly explain the reason for the delay.

– If a credit or debit card provider declines a consumer’s section 75 or chargeback claim, the FCA expects they should “explain the reasons for this clearly and fairly and explain any further options that the customer might have. This might include checking to see if they are covered under a policy of travel insurance, including policies held as part of a packaged bank account”.

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FCA urges Claims Management Companies and High Cost Lenders to work better together

On 31 March 2021, the UK Financial Conduct Authority published a news story encouraging claims management companies (‘CMCs’) and high cost credit lenders (‘HCC lenders’) to work better together.

The FCA is aware of:

– some CMCs having presented a claim to a HCC lender where the customer had never taken out a loan with them;

– some HCC lenders suspending lending whilst the complaint is being investigated;

– some CMCs using ‘catch all’ letters of authority; and

– some HCC lenders being unwilling to share information efficiently.

The FCA has reminded CMCs that:

– they must not make or pursue a claim if they have reasonable grounds to suspect the claim does not have a good arguable base or is fraudulent, frivolous or vexatious;

– they should take “all reasonable steps to investigate the existence and merits of each element of a potential claim” before making or pursuing a claim; and

– their investigations should enable them to make representations when presenting a claim which: (i) substantiate the basis of the claim; (ii) relate to the nature of the claim and are specific to the claim; and (iii) are not false, misleading or an exaggeration.