Author: Russell J Kelsall

Posted on

HM Treasury proposes to give the Ombudsman the power to impose case fees on professional representatives making complaints

On 5 December 2023, HM Treasury published a Policy Note setting out its proposal to make a statutory instrument (together with a draft statutory instrument) giving the Financial Ombudsman Service the power to impose charges on professional representatives (including solicitors, barristers and claims management companies) making complaints to the Financial Ombudsman Service.

If the draft statutory instrument is laid before Parliament, it will be subject to the usual parliamentary process. If made in the form of the draft, it will allow the Financial Ombudsman Service to decide the circumstances when a professional representative will be responsible for paying a case fee (at the moment only a respondent can be responsible for a case fee).

Posted on

FCA secures contract changes for BNPL customers

On 31 October 2023, the UK Financial Conduct Authority published a press release setting out the contract changes to buy-now pay-later products it had secured from both PayPal and QVC.

The FCA’s view was the follow terms were potentially unfair or unclear for customers:

– (for both) the terms dealing with continuous payment authorities; and

– PayPal’s terms on what happens when a consumer cancels their purchase funded by the BNPL agreement.

The FCA also published:

– the undertaking given by PayPal (Europe) S.à.r.l. et Cie, S.C.A.; and

– the undertaking given by QVC UK.

The FCA used its powers under the Consumer Rights Act 2015 to secure the changes.

Posted on

New EU Consumer Credit Directive published

On 30 October 2023, the new EU Consumer Credit Directive (CCD2) was published in the Official Journal of the European Union.

The timeline is:

– CCD2 will come into force on 19 November 2023.

– EU member states must adopt, and publish, the regulatory framework to implement CCD2 by 20 November 2025.

– CCD2 will come into force on 20 November 2026 (and it will repeal the EU Consumer Credit Directive from 2008).

Because the United Kingdom is no longer an EU member state, it will not need to implement it. However, it remains to be seen to what extent any of CCD2 is implemented into UK law to ensure parity with EU law.

Posted on

Land Registry updates Practice Guide on discharges of charges

On 18 September 2023, the Land Registry published an updated Practice Guide 31 on the discharge of charges.

There are two main changes:

– Section 6.7 (headed ‘What Land Registry issue on completion of an electronic discharge’) and Section 7.8 (headed ‘What Land Registry will issue on completion of registration of an e-DS1’) are deleted; and

– Section 7.5 (headed ‘What you should do if you act for a borrower’) has been changed.

These changes have been made because the Land Registry no longer sends redemption letters to borrowers.

Posted on

The FCA is making forms easier to complete

On 12 October 2023, the UK Financial Conduct Authority published a blog setting out the improvements it is making to the application process (including the publication of new forms).

The FCA says:

– it’s “making improvements to the process to make it quicker and easier for firms and people to apply for authorisation“;

– it’s making changes so it can “collect higher quality data and applications, while responding quickly to protect consumers from emerging harms“;

– the changes will mean that “duplicative requests for information are being removed and some of the data we already hold will be prepopulated to save time and effort“.

The first form the FCA is looking to update is Form A (which is one of the longest and most-used forms).

Posted on

ICO and FCA publishes joint letter on data protection provisions and effective communications to savings customers

On 18 July 2023, the Information Commissioner’s Office and the Financial Conduct Authority published a joint letter sent to UK Finance and the Building Societies Association setting out whether data protection regulations stop firms from telling savings customers about better deals. The joint letter’s answer is that this “is not the case“.

There are a number of useful points from the joint letter including:

– Data protection law gives data subjects the right to object from direct marketing.

– But this does not stop firms from providing communications when requested, or required, by a statutory regulatory (for example, the FCA under the consumer duty). This is true even if the customer has ‘opted out’ of direct marketing.

– PRIN 2A.5.3R and PRIN 2A.5.5R (both of which implement the consumer duty) both require firms to communicate with their customers so that they can make informed decisions.

– The ICO’s guidance on direct marketing and regulatory communications explains how to draft such regulatory communications, and includes illustrative examples. Firms should use a neutral tone and avoid active promotion or encouragement.

– Firms can therefore send regulatory communications to all their savings customers that provide neutral, factual information about the interest rate and terms of the savings product they hold, the interest rate and terms of other available savings products, and what their options are for moving to another product.

Posted on

FCA publishes draft guidance on financial promotions on social media

On 17 July 2023, the UK Financial Conduct Authority (the FCA) published a press release and draft guidance dealing with financial promotions on social media. This has been a hot topic for a number of years. The consultation period ends on 11 September 2023. Responses can be sent by email to gc23-2@fca.org.uk.

The key messages from the draft guidance are that:

– The FCA proposes to keep the key principles of Finalised Guidance 15/4, including its expectation that financial promotions should be standalone compliant.

– The consumer duty (which comes into force on 31 July 2023) will “raise our expectations of firms communicating financial promotions on social medium above the requirement of Principle 7 to be ‘clear, fair and not misleading’.“

– The FCA will continue to focus on compliance issues on social media (and, in particular, says firms should consider whether financial promotions for debt counselling would be appropriate given the complexity of such services).

– For unregulated buy-now, pay-later products, the promotion must outline the relevant risks and be balanced (and there’s a proposed example, in Figure 6, of a clear, fair and not misleading promotion).

– The FCA sets out its expectations on prominence standards for social media channels.

Posted on

Financial Services and Markets Act 2023 receives Royal Assent: impact for consumer credit firms

On 29 June 2023, the Financial Services and Markets Act 2023 received Royal Assent. It is often referred to as being part of the EU ‘bonfire’ legislation. From the date it comes into force, Section 1(1) of the Financial Services and Markets Act 2023 revokes the legislation listed in Schedule 1. This includes a number of provisions which make up the consumer credit regulatory framework.

We’ve been busy at Walker Morris Towers looking into the impact of Section 1(1) of the Financial Services and Markets Act 2023 on consumer credit firms. Here’s our one page summary. If you click on it, you’ll get a bigger version of it.

If anyone needs a PDF copy with the embedded links (shown in the image as underlining), please contact me, Jeanette Burgess, Leanna Bradshaw or Hasan Siddique.

Posted on

FCA’s board minutes record board’s discussion on PS23/5: Debt Packagers: Feedback to CP23/5 and final rules

Earlier this week, the UK Financial Conduct Authority (the FCA) published its board minutes from the meeting held on 25 May 2023.

Debt management firms may be interested to note that the board discussed the proposed policy statement on debt packagers. The FCA later published Policy Statement 23/5: Debt Packagers: Feedback to CP23/5 and final rules on 2 June 2023 (the FCA’s press release is available by clicking here and you can read my earlier post on the changes to CONC).

The following key points were noted by the FCA’s board members:

– the FCA’s team assured the board that any consequential risk on capacity in the debt advice sector from introducing the ban should be minimal and absorbable; and

– the Board was comfortable with the rationale for setting the implementation period at four months, and concluded that this, along with the mitigating steps the team proposed the FCA take during that period, was sufficient to appropriately balance the interests of firms with the urgent need to protect consumers from the harm.