On 25 March 2019, the UK Financial Conduct Authority (the FCA) published a press release and its policy paper on its long-awaited ‘Review of retained provisions of the Consumer Credit Act 1974’ (the Paper). The Paper has been presented to the Government and follows on from the FCA’s interim report (published in August 2018).
The devil is, of course, always in the detail (particularly where
consumer credit is concerned). However, and somewhat frustratingly, it
appears the FCA’s views in the Paper broadly follows its views set out
in the interim report.
For example, the FCA says certain ‘rights and protections’ need to be
maintain in legislation (but some rights and protections could be
transferred to the FCA’s handbook) (see Chapter 5). But it seems the
awfully complex modifying agreement provisions in Section 82 of the
Consumer Credit Act 1974 (the CCA), which have
long-since passed their sell-by date and often cause lenders headaches
when they want to do ‘the right thing’, will remain (see para 5.23).
Similarly, the FCA says the information requirements provide an “appropriate degree”
of consumer protection and should be kept. But the impact of the
sanctions, and some of the information, needs further consideration (see
Chapters 6 and 7).
But what the Report overlooks is the fact that the current regime is
complicated for both consumers and lenders (and the sanctions are more
serious than those which apply to a mortgage lender). Even a very
experienced Court of Appeal, in McGinn v Grangewood Securities Limited [2002] EWCA Civ 522, said (in para 1) that the appeal in that case raised “a
number of issues under the [CCA] which has recently provided so much
work for the courts. Like others, this case demonstrates the
unsatisfactory state of the law at present. Simplification of a part of
the law which is intended to protect consumers is surely long overdue
so as to make it comprehensible to layman and lawyer alike. At present
it is certainly not comprehensible to the former and is scarcely
comprehensible to the latter“. Since that decision, we have had
further significant changes in 2005, 2007/2008, 2011 and 2014 (none of
which have made the regime any easier to understand). No doubt the
Court of Appeal will have more to say on this in the future.
