The Finance and Leasing association (FLA) has announced their priorities for the New Year and an agenda for the incoming government ahead of the general election.
The FLA has identified three things they believe the incoming government should adopt to transform customer protection in the consumer credit market to support the growth of a sustainable economy.
In their agenda the FLA said the 45-year-old Consumer Credit Act (CCA) is “preventing lenders from providing the help that their customers deserve.”
It says the CCA requires lenders to use prescribed wording which is “severe in tone and content, very likely to deter customers from contacting their lender at the point where they most need help.”
The agenda also said the CCA has not kept up with the kind of innovation in the motor finance sector that could help increase the uptake of low emission vehicles.
According to the FLA the act makes it unnecessarily complex to finance a vehicle and its charging point in the same transaction.
The FLA said finding the right finance at the right time is vital for small businesses to grow and thrive but the reality for owners is the search for finance often starts at the end of the working day.
The UK’s patchwork of information needs to be streamlined into one single, intuitive source that can diagnose the type of finance needed with signposts of where to find it and provide links to local growth hubs where business advice is consistent across the country, according to the FLA.
Stephen Haddrill, director general of the FLA said: “The government should reform the CCA urgently, rather than continuing to turn a tin ear to those in financial difficulty, or those trying to help them. Consumers need to be given a credible, firm promise of legislation early in the new Parliament; legislation that will deliver protections appropriate for the 21st century.
“Although there is no shortage of online business advice, it’s less clear whether a small business owner could find, in one sitting, all of the information needed to decide on the appropriate finance for their circumstances. Remedying this would be a great step to improving UK productivity,” he concluded.