NEW rules on the regulation of the Consumer Credit industry

The role of the Financial Credit Authority (FCA ) is to regulate financial services firms in the UK, including banks and building societies, mortgage and insurance brokers, and financial advisers. On April 1st The FCA took over the regulation of such firms from the Office of Fair Trading (OFT).

The FCA has been given new additional powers to regulate the industry in respect of both credit providers and agencies that help people to manage their debts. In particular it will be taking a tough approach to consumer credit with stronger powers to clamp down on poor practice, including the power to close down a firm and order compensation to be paid to customers who are affected.

These new rules will affect firms that offer payday or personal loans, overdrafts, credit cards and importantly firms that help people manage their debts.

The biggest changes come for payday lenders and debt management companies, something that Citizens Advice have been campaigning for at the highest level for some time. They include:

A limit of two loan roll-overs.

Restricting to two the number of times a firm can seek repayment using a continuous payment authority.

The requirement that debt management firms pass on more money to creditors from day one of a debt management plan and to protect clients’ money.

A requirement to give all clients information on free debt advice.

The new rules for payday lenders will come into force on July 1 and debt management companies on April 1.If you are having problems managing your finances please contact your nearest Citizens Advice bureau for assistance.

For further information and advice, contact your local Citizens Advice Bureau or see www.adviceguide.org.uk.

Your local bureau – South Worcestershire Citizens Advice Bureau is open: Monday, Tuesday, Thursday and Friday 10am-4pm, Wednesday (Specialist Debt Advice - by appointment).

Tel: 01684 563611