Reference Case Number: FOI9550
Freedom of Information: Right to know request:
In the credit card study of 2016 ms14/6.3 point 1.39 you reference most firms objected to an opt-in for credit limit increases. Please confirm the exact meaning of this. I presume this is that consumers have to option and agree to any credit limit increases and cant be automatically done by the lender. Pls can you release details of the firms that objected to this.
1.43 - Where we have specific concerns around affordability assessments for individual firms, we are taking these forward through supervisory activity.
Please can you confirm which firms were taken under supervisory activity for affordability assessments. If this data cannot be release re specific firms pls can you give me light on your definition of affordability assessments and what criteria were met to take them under supervisory activity.
FCA response:
For the first part of your request, information on the proposal referenced in MS14/6.3 Credit card market study final findings report paragraph 1.39 is already available. Please see paragraphs 1.46 and 8.18 of the MS14/6.2 Credit card market study interim report[1].
We hold the names of the firms who did not agree with potential measures regarding an opt-in for credit limit increases but we are prohibited from disclosing these names to you, as it constitutes ‘confidential information’ for the purposes of section 348 of the Financial Services and Markets Act 2000 (FSMA), and which the FCA has received in the discharge of its public functions. We are therefore prohibited from disclosing this information under section 44 of FOIA. For more information on why this exemption applies, please see Annex A below.
For the second part of your request on affordability assessments, we hold the names of the firms taken under supervisory activity but for the same reasons as above we are prohibited from disclosing this information to you under section 44 of FOIA. For more information on why this exemption applies, please again see Annex A below.
With regards to our definition of affordability assessments, our expectations at the time were set out in (the now superseded) CONC 5[2].
This set out the requirement to carry out an assessment of creditworthiness, which included the ability of the customer to make repayments as they fall due, or within a reasonable period, without incurring financial difficulties or experiencing significant adverse consequences. At the time, firms were only required to carry out such an assessment before a credit limit increase if the proposed increase would be significant.
Finally, the criteria met in order to undertake the supervisory activity in question would have involved evidence suggesting that the firms were not complying with our expectations in relation to assessing affordability of credit limit increases or monitoring the effect of such increases on customers’ repayment records in the period after they were applied.
Annex A
Section 44 (Prohibitions on Disclosure)
Section 44(1)(a) of FOIA states that information is absolutely exempt from disclosure if this is prohibited by law. Section 348 of FSMA restricts the FCA from disclosing ‘confidential information’ it has received in the course of carrying out its public function. FSMA allows exceptions to this in a few specific circumstances, but none of these apply to this request.
Confidential information here is defined as non-public and non-anonymised information involving a person’s business or other affairs, which the FCA received in the course of carrying out its public function.
The information you requested is confidential information under this provision. If we disclosed this information, without the provider’s consent or the consent of the person the information is about (if different), we would be in breach of section 348 of FSMA. This would be a criminal offence.
In many requests for information under FOIA we have to judge different factors to decide whether disclosing the requested information would be in the public interest or not. For this request, we have an ‘absolute’ exemption against supplying the information, and so we do not need to make this kind of judgement.