FCA publishes report of retained provisions of the Consumer Credit Act
In line with its statutory duty, the Financial Conduct Authority (FCA) has reviewed the retained provisions of the Consumer Credit Act (CCA) 1974, and set out its findings in a new report.
The new report says that the government has an opportunity to change the rules on intimidating creditors’ letters, which are contributing to people in problem debt becoming suicidal. The rules on the ‘prescribed content’ of creditors’ debt letters are set out in the CCA stipulates that creditors must include wording that is complex, intimidating and out-of-date in letters to people in debt.
Recent research by the Money and Mental Health Policy Institute shows that the distressing nature of the ‘prescribed content’ of debt letters can contribute to people in problem debt becoming suicidal. It also showed that over 100,000 people in problem debt attempt suicide each year in England.
The report also reviewed the possibility of whether the Consumer Credit Act should be scrapped, and its provisions instead incorporated into the FCA’s rule-book. It says that it is possible for the government to move the regulations on ‘prescribed content’ into the FCA’s rule-book while maintaining existing customer protections and that doing so would be an opportunity to change these regulations, to make debt letters works better for both consumers and firms.
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