Since our last publication, the Consumer Credit Trade Association has announced that a new trade association for the UK financial services sector will launch in the summer. In other news, the Finance & Leasing Association have published new figures showing a growth in new business across all of the main consumer finance products in 2016.


UK

New financial services trade association to launch this summer

The Consumer Credit Trade Association (CCTA) has announced that a new trade association for the UK financial services sector will launch in the summer. Bob Wigley has been appointed as Chair with the new trade body integrating the remits and skills of six trade associations: The Asset Based Finance Association, British Bankers' Association, Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.

The Consumer Credit Trade Association, 14 February 2017

Unfair terms case – Abbott v RCI Europe [2016] EWHC 2602 (Ch)

The High Court found that the rules of a scheme for exchanging weeks at timeshare properties were not unfair for the purposes of the Unfair Terms in Consumer Contracts Regulations (SI 1999/2083). Considering provisions that have been replicated in the Consumer Rights Act 2015, the Court found that rules, which permitted the operators of the scheme a wide discretion as to how the weeks were traded, did not create a significant imbalance in the parties' rights and obligations.

FCA agrees redress scheme with direct mail order firm

The FCA has published a press release announcing that Express Gifts Ltd, a direct mail order firm, has entered into an agreement with it to provide £12.5 million redress to approximately 330,000 customers for selling insurance that offered little or no value. The firm agreed with the FCA that the insurance cover it had sold did not provide adequate value to customers because although it covered all items purchased, these were predominantly items of clothing, which customers would not generally considering insuring.

FCA, 17 February 2017

CLLS responds to FCA consultation on its future mission

The City of London Law Society (CLLS) has published the response of its Regulatory Law Committee to the FCA's consultation on its future mission. In its response, the CLLS focuses on the issues raised by the FCA of whether a duty of care should be imposed on financial service providers in respect of their retail customers. The CLLS also suggests that the FCA should consider seeking the reintroduction of the requirement for regulators to have regard to the impact of UK regulation on the international competitiveness of UK financial services.

CLLS

ICO fines Digitonomy £120K for sending marketing texts without proper consent

Credit broker Digitonomy Ltd has been fined £120,000 by the Information Commissioner's Office (ICO) for being responsible for millions of marketing texts sent without proper consent. The ICO investigation revealed that the company used an affiliate marketing companies to send out over five million messages offering cash loans as part of a marketing campaign. Under the DPA 1998, companies must have specific permission for electronic marketing. Digitonomy Ltd was unable to prove that it had proper consent.

ICO, 15 February 2017

Finance & Leasing Association new figures

The FLA has released the following figures

  • The number of second charge mortgage repossessions was 144 in 2016, almost 37% lower than in 2015. In the final quarter of 2016, the number of repossessions was 39, up by 18% compared with the same quarter in 2015.The rate of second-charge mortgage repossessions, as a percentage of average outstanding agreements, has fallen from 0.34% in 2009 to just 0.07% in 2016.
  • Asset finance new business (primarily leasing and hire purchase) grew by 5% in 2016 – the sixth consecutive year of growth. New business in December 2016 fell by 13% compared with the same month in 2015. New business in the commercial vehicle finance and business equipment finance sectors was up 7% and 16% respectively in 2016, while new finance for plant and machinery was flat over the same period.
  • Continued growth in consumer finance for new businesses saw a 9% increase in 2016. New business in December grew by 2% compared with the same month in 2015. Credit card and personal loan new business together grew by 8% in 2016, while retail store and online credit new business was up by 2% over the same period. Second charge mortgage new business grew 4% by value, while volumes fell by 6%.

FLA, 10 February 2017

EU

EBA consults on guidelines for complaints of infringements of PSD2

Draft guidelines have been published by the EBA, for competent authorities, on the complaints procedures to be taken into consideration to ensure compliance by payment service providers with the revised Payment Services Directive.

EBA, 16 February 2017

EBA opinion on European Commission's proposed amendments to draft RTS on separation of payment card schemes and processing entities under IFR

The European Banking Authority (EBA) has published an opinion on the European Commission's proposal to amend draft regulatory technical standards (RTS) submitted by the EBA relating to the separation of payment card schemes and payment processing entities under the Interchange Fee Regulation. The Commission had written to the EBA in January 2017 informing it that it intended to endorse section 2 of the draft RTS relating to accounting, but to amend sections 3 and 4 relating to organisation and the decision-making process.

EBA, 17 February 2017

EPC publishes responses to consultation on instant credit transfer scheme

The European Payments Council (EPC) has published a document setting out responses it has received to its consultation on the Single Euro Payments Area instant credit transfer scheme. Also set out are the EPC's responses to each of the comments received.

EPC, 16 February 2017

Joint Committee of ESAs opinion on money laundering and terrorist financing risks

On 20 February 2017, the Joint Committee of the European Supervisory Authorities (ESAs) published an opinion, addressed to the European Commission, on the risks of money laundering and terrorist financing affecting the EU's financial sector. The opinion identifies problems in key areas, including firms' understanding of the money laundering and terrorist financing risk to which they are exposed and the effective implementation, by firms, of customer due diligence policies and procedures.

ECB consults on amendments to Regulation on reporting of supervisory financial information

The European Central Bank (ECB) has published a consultation paper on amendments to the ECB Regulation on reporting of supervisory financial information (SSM Financial Reporting Regulation), together with FAQs on the consultation. The SSM Financial Reporting Regulation applies to credit institutions in the single supervisory mechanism (SSM). It supplements Commission Implementing Regulation 680/2014, which sets out financial reporting requirements for firms within the scope of the Capital Requirements Regulation. The ECB has published separately the proposed text of a Regulation amending the SSM Financial Reporting Regulation together with a consolidated version of the SSM Financial Reporting Regulation containing the proposed amendments. The webpage for the consultation states that the deadline for responses is 27 March 2017.

ECB, 17 February 2017

European Commission speech on international financial system

The European Commission has published a speech given by Vice President Valdis Dombrovskis, European Commissioner for Financial Stability, Financial Services and Capital Markets Union, on the merits of upholding a strong international financial system. Mr Dombrovskis highlights the advantages of international regulatory co-operation and a common approach to financial regulation. He argues that the effect of lax regulation in one country can be to create conditions for inadequate regulation and contagion throughout the world. He suggests that the effect of financial centres such as New York, London, Paris and Frankfurt having very different rules would be:

  • increased exposures to risks imported from jurisdictions with less stringent rules;
  • increased expense for global financial institutions in complying with different legal requirements; and
  • greater incentives for financial institutions to engage in regulatory arbitrage.

Mr Dombrovskis states that a strong commitment to international regulatory co-operation and internationally agreed standards should underpin the future relationship between the UK and the EU.

EC, 10 February 2017

Key contacts

Amanda Hulme

Amanda Hulme

Partner, Head of Financial Regulation
London

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Rosanna Bryant

Rosanna Bryant

Partner, Financial Regulation
United Kingdom

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