The regulator’s review of high-cost credit

The Financial Conduct Authority was almosthyperactive in 2018 trying to sort out the myriad problems left behind in theconsumer credit sector by the Office of Fair Trading and by its own hands-offapproach to banking conduct of business in the previous decade. Its work hasincluded belated guidance on how lenders of all types should assess thecustomer’s ability to afford credit, reports Adam Samuel.

AdamSamuelBA LLM DipPFS MCISI FCIArb Certs CII(MP&ER) Barrister and Attorney may be contactedatadamsamuel@aol.com.For links to where you can buy the secondedition of ‘Consumer Financial Services Complaints and Compensation’, seewww.adamsamuel.com/book.

The FCA is finally wading into a question itleft behind in the wake of the OFT’s loss of the first Supreme Court case onbank charges in 2009. There, the Supreme Court allowed the banks to chargeunfairly for overdrafts and other things under the Unfair Contract TermsDirective so long as their terms were intelligible. The FCA failed to follow-upon the banks whose terms were found by the first instance judge to be obscure.Now, the regulator wants to remove the extra charges involved in unauthorisedoverdrafts and make them operate like the authorised version.