We are marking 4 years since the FCA took on responsibility for regulation of consumer credit.
Video: Changes made to consumer credit
In our video, above, Andrew Bailey talks about the changes we’ve made and our continuing commitment to ensuring that the consumer credit market meets the needs of society.
Over the last 4 years, we’ve made a lot of changes to the consumer credit market. We’ve taken strong action to protect people – introducing a price cap and new rules on payday lending [1]that are saving borrowers around £150 million a year, and restricting the way credit brokers can charge fees[2].
Firms that haven’t met our expectations have given over £900 million in redress back to customers. We’ve checked tens of thousands of firms are doing the right thing by their customers, and made those that don’t, leave the market.
We carefully supervise those that remain, especially those that pose more risk to their customers. Under our rules firms must lend responsibly and treat customers fairly – our changes to credit cards[3] are set to save billions of pounds for millions of people by making firms do more to help customers repay debt more quickly, and we are looking closely at unarranged overdrafts.
We’ve made rent-to-own companies[4], who sell household goods for a weekly or monthly fee, be more transparent about charges and improve their standards, and supported nearly 350,000 of their customers in receiving £18 million in compensation. And we’re getting more help to the most vulnerable – improving the way debt management firms operate and directing over 20,000 people to free advice[5]. We are doing more on high-cost credit products[6], including initiatives to encourage alternatives, and we’re working alongside other groups to address wider problems that are related to credit and debt.