ARTICLE...
Who Will Benefit?
Last year soared past at the speed of light and the array of intervention from regulators was apparent. The OFT was clearly flexing their muscles, so too the FOS – which announced a record year in complaints – while the ICO together with the FSA took enforcement action on companies for data protection failings.
It has not all been bad news for the credit and collections industry though, and this was apparent at the latter end of 2009 where the courts provided consumers, the industry and regulators with much needed clarification.
The first important decision came from the Supreme Court, which ruled that the OFT could not investigate the fairness of overdraft charges on consumer current accounts.
The second array of cases that went through the high courts gave important guidance on the meaning of enforcement, providing true copies of consumer credit agreements and unfair relationships pursuant to the CCA 1974. It is clear that the judicial system is considering the true intention of the act, reflecting on the first debates in the House of Lords in June 1972.
It appears, however, that 2010 is braced for another tumultuous and challenging year, with the implementation of the Consumer Credit Directive (CCD), more focus on consumer protection from government and last but not least more powers for the ICO.
The CCD is set to revolutionise and make the already complex consumer credit regime more complicated for the UK. In addition, the implementation of OFT's Irresponsible Lending Guidance is presenting its own challenges in ensuring a fair guidance and coordinated approach, in line with the CCD implementation.
The UK has one of the most sophisticated consumer credit regimes in the EU. As such, the practical considerations of consumer credit harmonisation in the EU will prove very difficult unless government can put in place realistic transitional periods that make the implementation of the CCD workable. However, the changes all come at considerable time and expense and the question remains whether it will bring true benefit to the consumer or whether claims management companies will prosper in arguing technicalities and cause further consumer detriment.
In April 2010, the ICO is set to receive new powers so it can penalise companies and public bodies up to £500,000 for serious failings in respect of the Data Protection Act 1998. the ICO recently predicted that, during 2010, it will impose fines on at least nine companies. In addition, the FOS predicts a 27% increase of complaints.
Original article, by Willem Wellinghoff, courtesy of CCR.
