ARTICLE...
Understanding October's Requirements - Consumer Credit Act 2006
October is looming, and with it comes the implementation of the post contract information requirements under the Consumer Credit Act 2006.
While it is arguable whether the obligation rests on Debt Purchasers or whether it stays with the original creditor, it is the opinion of the Office of Fair Trading (OFT) that it is the responsibility of debt purchasers to comply. Legally this viewpoint is on shaky ground, however the OFT now have wide licensing powers which they will consider using should purchasers refuse to comply with their view.
Moving on from this argument the Debt Buyers and Sellers Group has been completing unprecedented work in assisting members with their understanding of the requirement, an information document has been produced which has been quoted as being 'the envy of other trade associations'.
The requirements are both complicated and demanding. Producing a single document which explains the obligations and which encompasses solutions to the issues raised by members has been a huge logistical task but the DBSG is extremely proud of what we have produced.
While it is impossible to actually tell members what they should do, and each member will also take their own legal advice, the document does give excellent information on the requirements.
Further to this, members are reminded that the DBSG is ready to assist in any query that you have. Simply call head office and they will attempt to answer your question. If they are at all unsure they will pass your query onto Robert Rosenberg of Lester Aldridge Solicitors who they have been working with throughout the process of writing the guidance.
Frequently Asked Questions have also been collated and added to a newly created Consumer Credit Act page on the DBSG website. This page also includes the guidance and useful links as well as a question box.
Leigh Berkley, the chair of the DBSG has also been carrying out unparalleled work in lobbying the Government to allow exceptions in the case of an IVA and when a debtor has 'gone away'.
This has resulted in a draft options paper which is currently under review by Government. The DBSG will keep members informed of its progress.
The DBSG is also collating issues with the Act in order to take these up with Government, please feel free to email any problems to robert@csa-uk.com and they will certainly work to lobby on members behalf. Regular meetings with the OFT and the Department for Business, Enterprise and Regulatory Reform will take place in order to do this.
A DBSG compliance group is also in the process of being created which has received some support, we are currently looking for more members to join this group, if you are interested please contact head office. Its purpose is to raise and discuss issues with the Act and possible solutions. It is likely to be an indispensible tool to promote the DBSG's awareness of difficulties with the Act.
The requirements can be broken down into seven categories, these are:
- statements are to be provided for fixed sum credit;
- statements are to be provided for running account credit (this is already a requirement under the 1974 Act);
- notices of arrears are to be provided for fixed sum credit;
- notices of arrears are to be provided for running account credit;
- notices are to be given for sums owing due to a default;
- a notice of default is to be given (this is already a requirement under the 1974 Act);
- if you are to charge post judgment interest a notice needs to be given.
The information requirements are highly technical and will not be gone into detail here but it suffices to say that an enormous amount of information needs to be passed from seller to purchaser. From account numbers to credits and debits made on the account post September 2008. Passing on this information is likely to be the biggest issue for the debt sale and purchase industry.
The DBSG's suggested solution, which would allow the requirement to be adhered to, is that along with the standard 'goodbye' letter a statement and notice of arrears should be sent. Doing so resets the trigger date for which statements and arrears notices are to be sent on, allowing purchasers to treat the obligation as if the period begins upon purchase.
Furthermore, it means that certain information relating to credit and debits does not need to be passed on, making the whole process a great deal easier.
Original article courtesy of DBSG. For further information visit www.dbsg-uk.com.
