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News for Members

30 April 2015

CCA Annual Convention 2015 - A Resounding Success


This year the CCA's Annual Convention was held at The Mere Golf Resort & Spa in the heart of the Cheshire Countryside.  As well as getting acquainted with the latest trends and challenges in the Home Credit sector, CCA members had the opportunity to take advantage of a world-class championship golf course situated in the idyllic Cheshire Woodlands, network with potential business and social contacts and meet up with old friends.  

To access the convention photo gallery, see the instructions at the bottom of this page.

The theme for this year's event was 'Credibility and Credentials for Home Credit', with a specific focus on compliance and positive customer outcomes.  For those who were unable to attend the convention, or if you need a quick reminder, here's a summary of the morning's presentations:

Chairman's Address - Guy Phillips

Guy's presentation covered the following key points:

Payday Cap

The most notable event during the last year was the payday cap which came into effect a few months ago.  Before the cap was introduced, the FCA carried out an in-depth research exercise at a cost of around £2m.  The research undermined two claims that proponents make, i.e:

  • that it is nonsense to suggest that caps restrict the supply of credit or access to credit
  • that overseas evidence absolutely proves that caps are not harmful

 

The FCA's research identified that:

  • caps do exclude customers from credit markets (the FCA have calculated that its cap would eliminate 160,000 people from access to payday loans)
  • there was no evidence that any analytical rate cap work had been carried out to support any claims regarding the overseas market

 

Misaligned Incentives

Guy explored the concept of misaligned incentives, originating from the classic payday model where customers who can't afford to repay a single instalment loan are invited to roll over the loan, resulting in the firm making bigger profits.  In contrast, firms that consistently make bad loans in home credit make losses and ultimately go bust.

Consumers & Money Management

Some of the more recent thinking on how people on modest incomes manage their finances and the growing realisation in the industry that not all credit products are suited to all consumers was put forward.  These consumers have specific needs, as identified by the Making Ends Meet report by Customer Focus in 2011:

  • when budgets are tight, consumers want to stay in control
  • these consumers (our customers) are not feckless or unwise - they think things through and weigh things up

 

The CCA's members were reminded that price isn't everything and firms can compete on elements such as speed of response and quality of service, two factors which are equally beneficial to consumers.   

Consumer Vulnerability

Finally Guy drew our attention to the FCA's recent discussion paper on Consumer Vulnerability and the perception that many people in vulnerable circumstances have of financial products, services and systems having been designed for the 'perfect customer'.   This doesn't apply to home credit which, in the words of FCA researchers, has been 'designed for humans' because this is what our customers want, need and deserve.

Director General's Report - Jack Bennett

Jack presented a progress update on the authorisation process and explained how the CCA is engaging with the FCA to raise the profile of the home credit sector:  

FCA Authorisation Update

A minority of the CCA's members have submitted their FCA authorisation applications but many are well into the process.  The FCA has already authorised over 10,000 firms from other sectors so that should provide encouragement to firms who are currently in preparation.   

Last year the Association invested £80,000 on two intensive national workshop programmes to help the CCA's members to navigate the authorisation process.  Both the Spring and Autumn events were well attended and the CCA has been busy dealing with requests for supporting material on CD since.   

For members who would like to take advantage of some external support to complete their authorisation applications, the CCA introduced (following a due diligence process) Simply Biz which runs the Consumer Credit Centre.  The organisation is able to offer members a range of application support services at a reasonable price.

FCA & Home Credit

Since the FCA became responsible for the regulation of consumer credit last year, the Association has been busy engaging with the organisation across a range of departments and levels of management.  The FCA is keen to find out more about the Home Credit sector and together with the Association, they want to help firms to put customers at the heart of their businesses to achieve swift authorisation.  The FCA's business plan for the next twelve months supports this objective.  To find out more, visit the FCA website.

The FCA also recognises the negative impact that the UK clearing banks' attitude to risk is having on many business sectors, particularly consumer credit.  It is important that firms have effective systems and procedures in place to ensure that their businesses cannot be used for financial crime.

Fee Update

Jack ended on a positive note by confirming that the FCA have proposed that the fees and levies for the Financial Ombudsman Service and Money Advice Service for 2015/16 will not increase.

Keynote Address - Geoff Meade

Geoff Meade, the Press Association's man in Brussels delivered an entertaining and witty insight into the multi-layered world of European politics.  Having spent over three decades covering Europe from its Brussels heart, Geoff presented a fascinating insider's knowledge covering the foibles, frustrations, relationships and attitudes of the various nations, not to mention the truth behind bent bananas and curved cucumbers!

Interactive Workshops

Our Interactive Workshop Programme covered two concurrent sessions:

  • Finalising your FCA Authorisation Application
  • An Update on Consumer Credit Marketing

 

A copy of the presentation slides can be obtained from the CCA by emailing steph.smallwood@ccauk.org

Convention Gallery

The official 2015 Convention Gallery is now available to view.  Please follow these steps:

1.  Go to the photographers website - www.icon-studio.co.uk

2.  Select Client Area from the main navigation bar

3.  Click on the CCA graphic

4.  Enter the password - CCA001

CCA News

CCA News - January 2015 cover

Our quarterly magazine, CCA News, keeps our members up to date with all the latest news and issues affecting the home credit industry.

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