CP17/10: Consultation on persistent debt and earlier intervention remedies

Open consultation: CP17/10
Consultation closes
Policy Statement
Q4 2017

We are consulting on measures to address persistent credit card debt and require credit card firms to use their data to identify customers at risk of financial difficulties. In this document we also set out details of an industry voluntary agreement to give customers more control over credit limit increases. These measures are part of our work to implement the findings of our study of the credit card market.

Show CP17/10 (PDF)

In our credit card market study we found that while the market works well for most consumers, we had significant concerns about the scale and persistence of potentially problematic debt. We set out a proposed package of remedies that sought to address the issues we identified. This Consultation Paper forms part of the implementation of that package of remedies.

In this Consultation Paper we are proposing measures to tackle persistent credit card debt and encourage earlier intervention. This includes a requirement on firms to take an escalating set of steps designed to encourage customers to repay debt more quickly and avoid getting into persistent debt in the first place.  Where customers are not able to repay their debt in a reasonable period, firms would be required to offer forbearance.

The proposed rule on early intervention would see credit card firms required to use the data available to them to identify customers at risk of financial difficulties and take appropriate steps. This builds on an existing rule that applies to all lenders, which requires firms to monitor a customer’s repayment record for signs of actual or potential financial difficulty.

We also set out the details of an industry voluntary agreement to give customers more control over credit limit increases. This will see the industry offer new and existing customers greater control over increases to their credit card spending limits.

Who this applies to

  • Firms that offer credit cards to consumers.
  • Consumers who hold credit cards, specifically those who carry a balance over a long period of time without making significant repayments, and customers at risk of financial difficulties.

It will also be of interest to consumer representative organisations and firms who provide debt advice.

What you need to do

Please send us your comments by 3 July 2017: 

Online response form

You can also:

  • email cp17-10@fca.org.uk or
  • write to: Oliver Morgans, Strategy & Competition, Financial Conduct Authority, 25 The North Colonnade, London E14 5HS

Next steps

After the consultation period has closed we will consider feedback we have received. Depending on the nature of responses, we expect to publish a Policy Statement outlining and Handbook changes later in 2017.

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