The FCA has published Policy Statement 18/4: Credit card market study: Persistent debt and earlier intervention – feedback to CP17/43 and final rules (PS18/4).

In PS18/4 the FCA sets out the responses it received to Consultation Paper 17/43: Credit card market study – persistent debt and earlier intervention remedies (CP17/43). In CP17/43 the FCA set out proposed changes to its persistent debt rules and guidance as a result of responses received to an earlier consultation. Specifically, CP17/43 focused on proposed new rules and guidance on the treatment of customers whose credit card debt persists over 18 to 36 months. Our blog on CP17/43 is here.

As a result of the feedback it received to CP17/43 the FCA reports in PS18/4 that it has amended its proposals to carve out business credit card products from the scope of its rules. The rules that have been made do not apply to credit card products promoted solely for the purposes of the customer’s business. But the new rules will apply to personal credit cards being used by businesses.

The FCA also reports that there are no other changes to its proposals.

The final rules and guidance that the FCA has made, for insertion in the Consumer Credit sourcebook, are in Appendix 1 of PS18/4. These come into force on 1 March 2018 and firms have six months, until 1 September 2018, to be fully compliant.

The new rules and guidance in PS18/4 are part of a package of measures that the FCA has introduced to implement the findings of its credit card market study (CCMS). With the publication of PS18/4, this package is now largely in place. The next steps for the implementation of the CCMS are for the FCA to:

  • assess the effectiveness of the industry voluntary remedies. If any of these measures prove to be ineffective, the FCA will consider further action;
  • monitor its persistent debt and earlier intervention remedies by looking at, for example, the number of customers contacted at the 18 month intervention stage, the proportion of those that reach the 36 month stage and the actions firms take at 36 months; and
  • review how effective its remedies are after they have been fully implemented by firms and in operation for long enough to assess consumer outcomes. The FCA expects this to be in 2022 or 2023.

View New credit card rules introduced by the FCA, 27 February 2018