The deadline for finance companies to get their systems and
processes fully compliant with the incoming Consumer Credit
Directive (CCD) has been extended to January 31 2011 – which will
come as a relief to the motor finance industry.
Previously, there had been indications from the Department for Business, Innovation and
Skills (BIS) that point of sale finance providers would be
required to comply with the new regulations by June of this year. A
final draft of the CCD is due to be published in March, and there
was widespread industry alarm over the short window of opportunity
available to get systems, staff and selling processes up to speed
with the CCD.
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A spokesperson for BIS said: “We are committed to introducing
stronger protection for consumers when borrowing money. This new
legislation means lenders must act more responsibly. In order to
ensure that these changes are made in a measured and clear way,
businesses are being given until January 31 2011 to comply.”
In the meantime, BIS said, lenders are encouraged to become
compliant “as early as possible”, but have been given the breathing
space “to make necessary changes to their I.T. systems and to train
staff”.
Fiona Hoyle, head of consumer finance at the Finance &
Leasing Association, welcomed the news. “The decision to extend the
implementation period of the Consumer Credit Directive to January
2011 is a sensible one.
“As the regulations have not yet been finalised, lenders would
have struggled to make the changes necessary to meet the original
June 2010 deadline. During the implementation period consumers will
continue to be protected by the UK’s existing consumer credit law,
which is among the most robust in Europe.”
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By GlobalDataSpencer Halil, director of Alphera Financial Services,
commented: “We welcome this recognition that the industry should
not be expected to rush through the implementation of the CCD over
a timeframe of only a few months. However, it is now possible that
dealers and brokers could be faced with a range of different
implementation dates and interpretations from their lenders over a
prolonged period.
“I hope that the industry will pull together to ensure a common
approach to achieving a smooth transition for everyone involved, by
the deadline set by BIS of January 31 next year.”
