Rights, Responsibilities
and Regulations
The ‘3 Rs’ run through the core of all consumer credit
business, yet it seems that the more the ranks of the rules swell,
the less the requirements are clarified.
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Rights are in many ways the bottom
line of consumer protection – the right of consumers to be
protected from unfair lending practices, and to have information
provided to them, were the dual purposes of the 1974 Consumer
Credit Act.
Since then, the Act has been amended
and supplemented by dozens of sets of regulations, including six
sets which give effect to the recent Consumer Credit Directive.
There is also no shortage of guidance
produced by the Office of Fair Trading which provides some steer
into how the regulator will interpret the provisions – essential
reading.
Then there is the case law.
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By GlobalDataSo, arriving at a process which is
compliant with the law and the guidance is as far from
straightforward as it possible to get. But does anyone truly
benefit from this mire of complexity?
For example: consider the issue of
forbearance when dealing with customers in arrears, a requirement
set out in the Irresponsible Lending Guidance.
When faced with a customer who is
clearly over-committed, is allowing time before he is parted from
his depreciating asset necessarily in his interests?
There is also the requirement for
pre-contract information to be set out in a standard form – the
SECCI – which runs to several pages and includes a draft of the
final agreement, notices about the right of withdrawal,
early/partial settlement and more.
Does providing more information mean
that it is more easily understood, or indeed that it will encourage
a closer reading of the so-called small print? The ‘3 Rs’ are one
thing, but does it take us back to the basic purposes? Not
likely.
Nicola Hoskins is a solicitor at
Optima Legal
