Category: Consumer credit

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HM Treasury publishes new amending regulations changing the form and content of default, enforcement and termination notices

On 11 November 2020, HM Treasury laid before Parliament the Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020 and published an explanatory memorandum.

These regulations amend the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983, which prescribe the form and content of:

– an enforcement notice under Section 76(1) of the Consumer Credit Act 1974;

– a default notice under Section 87(1) of the Consumer Credit Act 1974; and

– a termination notice under Section 98(1) of the Consumer Credit Act 1974.

These changes make significant changes to the form and content of such notices. The changes come into force on 2 December 2020.

By Regulation 9 of the Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020, there is a transitional period of six months from 2 December 2020 during which time a notice under Sections 76(1), 87(1) or 98(1) of the Consumer Credit Act 1974 will be compliant if it complies with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 immediately before its amendment on 2 December 2020.

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FCA announces further proposals to support consumer credit customers impacted by COVID-19

Earlier today, on 4 November 2020, the UK Financial Conduct Authority published a press release setting out its further proposals to support consumer credit customers impacted by COVID-19.

There is:

– a draft updated guidance for consumer credit firms;

– a draft further updated temporary guidance for personal loans;

– a draft further updated temporary guidance for credit cards (including retail revolving credit cards);

– a draft further updated temporary guidance for motor finance;

– a draft further updated temporary guidance for high-cost short-term credit;

– a draft further updated temporary guidance for rent-to-own, buy-now pay-later and pawnbroking agreements; and

– a draft Consumer Credit Instrument updating provisions in CONC 6.7 and 7.3.

The FCA proposes:

– those who have not yet had a payment deferral will be eligible for two payment deferrals of up to six months in total;

– those who have had one payment deferral, will be eligible for another payment deferral of up to three months;

– those with high-cost short-term credit agreements, who have not yet had a deferral, can ask for a one month deferral but no more;

– to allow customers until 31 January 2021 to ask for a payment deferral;

– if a customer has restarted payments after a deferral, they are not entitled to another deferral but should receive tailored support if they are experiencing payment difficulties.

– if customers can afford to make repayments then they should continue to do so;

– borrowers should hold off contacting their lender until the enhanced measures are in place;

– lenders should hold off repossessions of goods, unless there are exceptional circumstances, until 31 January 2021; and

The FCA also proposes to maintain the existing position on overdrafts and premium finance.

The FCA has invited comments by 10am on 6 November 2020.

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HM Treasury publishes revised draft statutory instrument: the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020

Earlier today, on 10 September 2020, HM Treasury published a revised statutory instrument: the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020.  This replaces the draft published on 15 July 2020.

You can view the draft revised statutory instrument by clicking here, and view the explanatory memorandum by clicking here and the impact assessment by clicking here.

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Issue 63 of Goode: Consumer Credit Law and Practice published with new chapter on ancillary credit business and credit reporting

Issue 63 of Goode: Consumer Credit Law and Practice has now been published. This includes a new chapter 48, written by me, on ancillary credit business and credit reporting. It was rather humbling when Professor Sir Roy Goode QC invited me to join the editorial team a few years ago and it’s great to see my first chapter being published.

I’ve also written four new case reports: these appear in Goode: Consumer Credit Reports.

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FCA publishes updated temporary guidance to motor finance and high cost credit firms dealing with customers needing COVID-19 related payment deferrals

Earlier today, on 15 July 2020, the UK Financial Conduct Authority published updated temporary guidance to motor finance and high-cost credit firms dealing with customers needing COVID-19 related payment deferrals.

There’s updated guidance for motor finance, for high-cost short-term credit and for rent-to-own, buy-now pay-later and pawnbroking agreements. There’s also a short feedback statement.

My one page summary is (and you can see a bigger version if you click on it):

If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.

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FCA consults on draft updated temporary guidance to motor finance and high cost credit firms dealing with customers needing COVID-19 related payment deferrals

Earlier today, on 3 July 2020, the UK Financial Conduct Authority issued a consultation on draft updated temporary guidance to motor finance and high-cost credit firms dealing with customers needing COVID-19 related payment deferrals.

There’s draft guidance for motor finance, for high-cost short-term credit and for rent-to-own, buy-now pay-later and pawnbroking agreements. There’s also a draft handbook instrument.

My one page summary is (and you can see a bigger version if you click on it):

If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.

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FCA publishes updated temporary guidance to credit card, overdraft and personal loan consumer credit firms dealing with customers needing COVID-19 related payment holidays

Earlier today, on 1 July 2020, the UK Financial Conduct Authority issued its finalised and updated temporary guidance to credit card, overdraft and personal loan consumer credit firms dealing with customers needing COVID-19 related payment holidays.

There’s finalised updated guidance for credit cards (including retail revolving credit), for overdrafts and for personal loans. There’s also a feedback statement and a press release on banks’ overdraft pricing decisions and plans to support consumers.

My one page summary is (and you can see a bigger version if you click on it):

If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.

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FCA consults on draft updated temporary guidance to credit card, overdraft and personal loan consumer credit firms dealing with customers needing COVID-19 related payment holidays

Earlier today, on 19 June 2020, the UK Financial Conduct Authority issued a consultation on draft updated temporary guidance to credit card, overdraft and personal loan consumer credit firms dealing with customers needing COVID-19 related payment holidays.

There’s draft guidance for credit cards (including retail revolving credit), for overdrafts and for personal loans. There’s also a draft handbook instrument.

My one page summary is (and you can see a bigger version if you click on it):

If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.

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Voluntary terminations for regulated hire purchase and conditional sale agreements – does a customer have to take care of the vehicle whilst collection arrangements are being made?

The current COVID-19 restrictions mean asset and motor finance lenders are unable to collect vehicles as quickly as they’d like when a customer voluntary terminates a hire purchase or conditional sale agreement under Section 99(1) of the Consumer Credit Act 1974. Can you ask your customer to carry on taking care of the vehicle whilst you make arrangements to collect it?

After an agreement has been voluntarily terminated, the customer is likely to be a gratuitous bailee of the vehicle.  This type of bailment is known as a ‘deposit’ because the customer keeps possession of the vehicle without payment.

It’s likely there is two possible types of bailments: (a) involuntary deposit or (b) necessary deposit.

Involuntary deposit – this is where the vehicle is left with the customer against her wishes. In most cases, the customer will need to take reasonable care of the vehicle. But the customer will normally need to make good any damage caused deliberately but not negligently.

Necessary deposit – this is where the vehicle is left with a customer because of a peculiar stress or set of circumstances such as an unforeseen disaster (which the Covid-19 pandemic and lockdown arguably could fall into). The customer is likely to be responsible in negligence or bad faith whilst she has the vehicle.

So how do you protect your position and the vehicle? Talk to your customer. Ask if they’re willing to hold on to the vehicle whilst you make your collection arrangements. And talk to them about insurance, and who is going to pay for it.