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In April 2014 the FCA replaces the OFT as the consumer credit regulator. Under its wing will fall consumer issues such as credit cards and loans, debt counselling and selling goods and services on credit. Although some regulation will be based on existing OFT guidance, the FCA brings its own agenda to the mix. Speaking at the launch of the FCA consultation on consumer credit, Chief Executive Martin Wheatley said: “Our aim is to create a regime that protects consumers and allows businesses to operate. There is a balance to be struck here, and to make sure we get it right we want to hear from as many interested parties as possible.”
Highlighting payday loans in particular Mr Wheatley acknowledged that they have a place to pay but said that credit should only be offered to those who can afford it, adding:“Today I’m putting payday lenders on notice: tougher regulation is coming and I expect them all to make changes so that consumers get a fair outcome. The clock is ticking.”
Although the FCA are giving firms a little leeway to enable them to modify their systems it is apparent that the FCA ethos of fairness and strong corporate culture will be applied to consumer credit as it is to other areas regulated by the FCA. Page 42, Section 4.27 says:
“The FSF assessment process will help us come to a view about the extent to which a firm embeds fair treatment of customers and market integrity in the way it is run. This, at the most intensive end of assessment, covers the product/service lifespan from design through to sales/service delivery and after sales/service handling. The assessment of governance and culture will be crucial, as these are key factors that drive whether a firm treats its customers fairly.”