Consumer credit

Question 1

Consumer credit act.
What happened in the following dates?
1974
2006
2014
2016

Answer 1

1974:
Consumer credit act introduced -
<25k regulated .
>25k & mortgages exempt.
APR was the true cost of a loan and cooling off period 14 days.

2006
Udated and 25k removed.
Financial ombudsman service introduced.

2014
FCA moved in and 2nd charge lending scrutinised

2016
Directly regulated by the FCA

Question 2

How do the FCA handle the consumer credit act?

Answer 2

All firms are regulated by the FCA and all rules apply.
Must treat the customer fairly.

The FCA enforce the CONC (consumer credit sourcebook) and are very rigirous.

FCA have the power to withdraw priviliges.

Question 3

Conc - Consumer credit
What are the 11 rules?

Answer 3

1. Purpose
2. Principles - not misleading
3. Promotions - risk warnings
4. Quotations - rates & charges
5. Responsible lending
   5A. Payday lending cap
6. Post contract changes
7. Arrears
8. Debt advice
9. Rules for debt management companies
10. Peer to peer rules on cancellation

Question 4

Consumer credit directive - what are the directives?

Answer 4

Has to have:
APR
Check people are credit worthy
Explain properly
Provide all information
14 day cooling off
Redress if >30k and <60k
One months notice to stop
Tell customer if debt is sold
Fees must ne disclosed.