
Trump Administration Executive Order (EO) Tracker
Lenders and owners will need to amend their CCA section 76 (enforcement), 87 (default), and 98 (termination) notices to reflect new requirements and prescribed text. HM Treasury is seeking to make the notices less intimidating by changing the way statutory wording is given prominence, updating the tone of such wording, and moving away from or explaining more technical terms to aid consumer understanding.
Whilst the changes take effect on 2 December 2020, there is a 6 month transition period for lenders and owners to switch to the new style and form of notices.
The Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020 were laid before Parliament on 11 November 2020 requiring changes to be made to the form of notices used by a creditor or owner before they can take certain action or terminate a regulated credit agreement.
The regulations are being amended to:
The changes take effect on 2 December 2020. Firms have until 2 June 2021 to move to the new approach.
The changes are being made to reflect findings in 2018 of the Money and Mental Health Policy Institute that amending letters sent to those in debt would have a difference on consumer mental health (the Institute found that over 100,000 people in problem debt attempt suicide each year).
The changes are also being made in response to economic and mental health impacts of COVID-19.
The regulations are focused on mitigating possible triggers for vulnerable indebted customers, toning down the way the information is presented to make it less threatening and easier to understand.
The amendments are not intended to change the underlying message of the relevant forms, merely the manner in which such message is delivered. However, there are a couple of minor drafting issues in the new text that lenders and owners should note.
Both are almost certainly oversights; however in the latter case the change could serve to make the statement more threatening, rather than less.
Given the repercussions of getting notices wrong, lenders and owners will want to ensure changes are made and double checked as a matter of priority.
The changes take effect on 2 December 2020.
Changes will need to be made to your relevant notice templates so that lenders and owners are using the new version on and from 2 June 2021 at the latest.
If you would like to discuss any of the above, please contact us.
Authored by Charles Elliott