Compliance Roundup - 14 November 2024
14 November 2024
In this issue:CSA responds to FCA’s call for input on simplifying rulebookOn 31 October 2024, the CSA submitted its response to ‘FCA Call for Input: Review of FCA requirements following the introduction of the Consumer Duty’. The FCA sought views on simplifying its Handbook, including the removal of duplicative rules and guidance or rules which were no longer necessary under the Consumer Duty regime. It also sought input on areas that may require further clarity. The CSA response highlighted the urgent need for reform of the Consumer Credit Act, with retained provisions that are incompatible with the Consumer Duty requirements. We also set out concerns about the Financial Ombudsman Service’s (FOS) growing quasi-regulatory status and the resulting uncertainty for firms. The response also identifies some more minor areas of the Handbook which may benefit from clarity or review. The CSA response is available here. Court of Appeal ruling in Hopcraft, Johnson and Wrench: potential wider implications for membersThe recent Court of Appeal judgment in the cases of Hopcraft, Johnson, and Wrench has significant implications for the motor finance industry and may have implications for any members involved in this sector, or even more widely depending on the scope of the judgment. The court ruled that motor dealerships, acting as credit brokers, owe both a fiduciary duty and a “disinterested duty” to consumers. This means that dealerships must act impartially and disclose any commissions received from lenders or make it very clear they are not acting in the customer’s best interests and are not impartial. The judgment emphasised that even partial disclosure of commissions, if not sufficiently clear, could be deemed inadequate, potentially leading to claims of secret commissions. For members, this ruling underscore the importance of transparency in credit agreements. The Financial Conduct Authority (FCA) is closely monitoring the situation and considering the implications of the judgment. The decision could lead to increased scrutiny of existing credit agreements and potential claims from consumers who were not fully informed about commission arrangements (and perhaps more importantly, from claims management companies). Moreover, the ruling may impact the broader credit market, as lenders and brokers reassess their practices to ensure compliance. It may also impact broader markets as the judgment is not restricted to discretionary commission models, regulated agreements or the motor finance industry. Debt purchaser members should be aware of these developments and prepare for possible adjustments in the market dynamics and legal landscape. Two of the banks have indicated their intention to appeal to the Supreme Court. The Court of Appeal refused permission to appeal but parties can still seek permission to appeal from the Supreme Court. In the meantime, this leaves uncertainty in relation to both existing and new court cases and we understand that some county courts are granting stays. FCA statement on Court of Appeal judgment in Hopcraft, Johnson and Wrench | FCA MALG launches podcast to enhance debt solutions through collaborationThe Money Advice Liaison Group (MALG) has launched a new podcast aimed at fostering conversations to improve the lives of people in debt. Hosted by Helen Gill of Engage Comms and MALG CEO Bob Winnington, the podcast is designed for professionals across the debt landscape. It seeks to provide inspiring insights into how collaboration and innovative approaches can address the challenges faced by those in financial difficulty. The first episode, launched at the MALG Conference in Leeds, features Dr. Chris Fitch discussing the “Share Once Support Register,” a new initiative to streamline support for vulnerable consumers. The podcast also emphasises the importance of data sharing and the fair treatment of vulnerable customers. With episodes featuring experts like Dr. Fitch, listeners can gain a deeper understanding of how to implement these principles in their own practices. This initiative by MALG underscores the ongoing need for innovation and cooperation in the debt advice sector to better support those in financial distress. Money Advice Liaison Group (MALG) launches podcast to facilitate conversations about improving the lives of people in debt | Money Advice Liaison Group EDPB’s first report on EU-US data privacy frameworkThe European Data Protection Board (EDPB) has released its first report on the EU-U.S. Data Privacy Framework (DPF), highlighting significant developments and ongoing concerns. The report acknowledges the efforts by U.S. authorities and the European Commission to implement the DPF, including the establishment of a new certification process and a redress mechanism for EU individuals. However, the EDPB notes the low number of complaints received and emphasizes the need for U.S. authorities to initiate monitoring activities to ensure compliance with DPF principles. For members, this report underscores the importance of adhering to stringent data protection standards when handling personal data transferred from the EU to the U.S. The EDPB’s recommendations include the development of clear guidance for DPF-certified companies on data transfer requirements and the necessity of maintaining robust safeguards for human resources data. Additionally, the EDPB calls for continuous monitoring of the practical implementation of these safeguards to protect the rights and freedoms of EU individuals. The EDPB also addresses concerns related to law enforcement access to personal data, stressing the need for effective implementation of safeguards introduced by the U.S. Executive Order 14086. The Board recommends that the European Commission closely monitor the functioning of these safeguards, particularly in relation to the principles of necessity and proportionality. This vigilance is crucial to ensure that the data protection rights of EU individuals are upheld, even when their data is accessed by U.S. public authorities for law enforcement purposes EDPB adopts its first report under the EU-U.S. Data Privacy Framework and a statement on the recommendations on access to data for law enforcement | European Data Protection Board StepChange highlights rising mortgage repossessionsStepChange has reported a significant increase in mortgage repossessions, highlighting the growing financial strain on UK households. The charity’s latest data reveals that more homeowners are struggling to keep up with mortgage payments, leading to a rise in repossession cases. This trend is attributed to the ongoing cost-of-living crisis, which has seen many families facing higher living expenses and reduced disposable income. StepChange emphasises the importance of early intervention, encouraging lenders to work closely with borrowers to find sustainable solutions before resorting to repossession. The charity also advocates for increased access to debt advice services. Additionally, StepChange calls for policy changes to better protect vulnerable homeowners, suggesting that the government and financial institutions collaborate to create more robust safety nets for those at risk of repossession. Mortgages & Credit Use Data. Response StepChange ConsultationsThe following are consultation papers that are currently open for responses and may be of relevance to some or all CSA members. Also listed are papers that have recently closed to which the CSA has responded. If an industry response is warranted and you want to contribute, please contact CSA head of policy, Daniel Spenceley (daniel.spenceley@csa-uk.com). Regulation of Buy-Now, Pay-Later: consultation on draft legislation (October 2024) - GOV.UK
Closing date: 29th November2024
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