The Finance & Leasing Association (FLA) has identified three improvements that the incoming Government must adopt to transform customer protection in the consumer credit market, and strengthen the growth of a sustainable and productive economy.
Priorities for 2020 and Beyond highlights the fact that the 45 year old Consumer Credit Act (CCA), which underpins every consumer credit transaction in the UK, is failing consumers because not only does it require lenders to send old fashioned and severely worded letters to those in financial difficulty, but it actually delays how quickly lenders can step in to offer those customers more time to make payments.
The CCA has also not kept up with the kind of innovation in the motor finance sector that could help to increase the uptake of low emission vehicles. As currently drafted, the Act makes it unnecessarily complex to finance a vehicle and its charging point in the same transaction.
Finding the right finance at the right time is vital for small businesses to grow and thrive, but the reality for owners is that 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, signpost where to find it, and provide links to local growth hubs where the quality of business advice is consistent across the country.
Commenting on the publication of the FLA’s Priorities for 2020, Stephen Haddrill, Director General of the FLA said: said: “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.”