The monthly round-up of news, guidance, legislation, and case law from Shelter's Specialist Debt Advice Service.
News and legal updates
This month's legal round-up includes an open letter to government, the review of enforcement agent legislation, and the government’s response to the CCA consultation.
Open letter sent to the government on the implications of recent Debt Respite Scheme High Court decisions
Shelter and other signatories wrote to HM Treasury to clarify the role of the debt advice provider in delivering mental health crisis moratoriums.
Shelter's letter to HM Treasury
Reform of the CCA: response to the consultation
HM Treasury has responded to its Consumer Credit Act consultation. In summary, there is disagreement between industry stakeholders and consumer groups about how best to protect consumers.
Consumer groups, including charities, want sanctions for non-compliance to remain in legislation as they act as a strong motivator for creditors to comply. However, the industry considers that the FCA has the necessary powers to supervise firms and enforce breaches.
Following the responses, HM Treasury confirmed it will progress its plans to overhaul the CCA. It plans to develop proposals that will move most of the CCA into the FCA handbook and repeal much of the CCA.
The second stage consultation is due at some point in 2024 and the government plans to engage with respondents and stakeholders through ‘bilateral meetings and broader roundtables’.
Reforming the Consumer Credit Act 1974: Consultation Response
Review of the Taking Control of Goods (Fees) Regulations 2014
The Ministry of Justice (MoJ) has published a review of the Taking Control of Goods (Fees) Regulations 2014. The review was carried out to establish whether the original 2014 fees remain appropriate and to explore ways of encouraging the settlement of debt at the earliest stage possible.
The MoJ intends to amend the Schedule to the Fees Regulations in relation to Regulation 4 to:
increase the fixed fees by 5% for both High Court and Non-High Court Fees
increase the thresholds above which a percentage fee can be added to certain fees by 24% to £1,900 for non-High Court cases and £1,200 for High Court cases
The MoJ intends to consult on further reforms, which include:
extending the minimum notice period from 7 days’ notice to 28 days’ notice before enforcement agents move from the Compliance Stage to the Enforcement Stage for individual debtors
amending the Notice of Enforcement to signpost debtors for advice and encourage engagement with enforcement agents
Further reforms also include amending the Regulations to clarify that HCEOs can agree to repayment plans at the Compliance Stage, make it clearer when the fee for Enforcement Stage 2 can be recovered, and require the non-High Court fee scale to be used for specific High Court Writs.
Following the conclusion of the further consultation, the MoJ intends to implement the uplifts and potential reforms via a Statutory Instrument by the end of 2023.
Review of the Taking Control of Goods (Fees) Regulations 2014
FCA Consumer Duty starts on 31 July
The Consumer Duty comes into force on 31 July 2023, which requires firms to act to deliver good outcomes for customers.
Buy Now Pay Later: a review by the Money and Pensions Service
The Money and Pensions Service (MaPS) has published a report on the scale and nature of the UK’s Buy Now Pay Later (BNPL) market.
Key findings include:
people are increasingly likely to use BNPL for day-to-day essentials
awareness, accessibility and affordability are three key drivers for the increase in BNPL adoption
regulations and behavioural nudges have shown to be promising in encouraging better credit management
people using BNPL products are mostly under 40 years old, but demand is increasing across all user groups
MaPS Buy Now Pay Later: a review of the market
Ombudsman News
Ombudsman News Issue 182 has been published.
In this edition, the Financial Ombudsman Service (FOS) discusses how it is preparing for the Consumer Duty. FOS also shares its latest annual complaints data and insight for 2022/23.
Previous Ombudsman News issues
Leeds Business and Property Courts Litigant in Person Scheme launches in September 2023
Enterprise Chambers has announced that a scheme aimed at supporting litigants in person in Leeds will be launched in September 2023. The scheme will provide free ‘on the day’ representation for those representing themselves in court proceedings.
The Leeds Business & Property Courts Litigant in Person Scheme
Case law
Find debt case law summaries by topic on Shelter Legal.
Mental health crisis moratorium cancellations
The High Court made directions to submit medical evidence for a mental health crisis moratorium following a creditor application to cancel.
Guy and others v Brake and others [2023] EWHC 1560 (Ch)
The High Court cancelled a mental health crisis moratorium on the ground of unfair prejudice due to insufficient medical evidence.
IV Fund Limited SAC v Mountain [2021] EWHC 2870 (Ch)
Terminating a hire purchase agreement
Specialist Debt Advice answers a query from an adviser dealing with a hire purchase termination, explaining how and when a debtor can limit their liability using the voluntary termination provisions in the Consumer Credit Act.
Read about terminating a hire purchase agreement.