NEWS...
Disappointment on 'Illogical' Letters Decision
There has been widespread disappointment in the credit industry following a statement on 'gone-away' letters from BERR.
The government dealt a blow to how the industry operates with regard to the requirements of sending letters to 'gone away' debtors and those in individual voluntary arrangements (IVAs).
Senior representatives of the credit industry had previously approached the Department for Business, Enterprise and Regulatory Reform (BERR) to suggest an exemption in these cases, with a view to avoiding the need to send millions of unnecessary letters - which was required as part of the Consumer Credit Act.
However, despite BERR agreeing to consult on the issue, it is now proposing that lenders and those collecting debts must still send an abbreviated statement annually, rather than the full information.
It says that this avoids sensitive financial information falling into the wrong hands, whilst still ensuring contact is still made with those intent on ignoring their letters.
This is, essentially, an amendment to the existing secondary legislation, rather than a wholesale change. It also means that the cost to the credit industry remains the same.
Further consultation on the proposed changes - as well as other amendments to the Consumer Credit Regulations 2007 - is set to take place in 2009.
Leigh Berkley, Chairman of DBSG, lobbied on the letters issue. He explained: "It is an extremely disappointing decision which seems to have misinterpreted our concerns and come to an illogical conclusion."
Leigh added that the DBSG and CSA would consult with their members to decide on how to proceed over this issue, with the CSA already scheduled to meet with Gareth Thomas MP in February.
The CSA is also forming a working group on data quality, liaising with the credit reference agencies on problems such as mis-tracing.
Original article courtesy of Credit Today. For further information visit www.credittoday.co.uk
