law firm warns lenders of the impact of CCD changes

1st December 2009

A warning to lenders this Christmas of the impact of changes to the Consumer Credit Act.

With December being the busiest month of the year for consumer credit lending with large debts often placed over the Christmas period, the national law firm is telling banks, finance houses and credit card lenders to start changing their procedures and processes now in order to have tested systems in place ready for next summer when the Consumer Credit Directive (CCD) comes into effect. Leaving it until next Christmas will be too late.

The CCD introduces a variety of changes to the way in which consumer credit is promoted, advertised and documented. The CCD comes into force in June 2010 to complement the existing 1974 Consumer Credit Act. Draft guidelines show a change to certain aspects of consumer finance law and as a result will have an impact on all finance companies, banks and lenders. The law firm urges lenders to ensure that the advice and communication given to customers is carefully examined to make sure it reflects the new changes. Advertising and agreements which do not reflect the new changes may be open to legal challenge.

HBJ Gateley Wareing finance partner James Baird said: ‘The message about communicating the changes and testing systems has to get through to lenders. If people wait until next year they will be too late which is why we are talking to clients and organisations now about how they can plan and what they need to do to be ready for the changes next year. Lenders will not be able to wait until next Christmas before taking action. They need to act now.’