These notices are generally required where a lender wishes to take action to enforce a consumer credit regulated agreement against the borrower, either on a breach by the borrower of the terms of their agreement or in non-default cases.
These are changes that both consumer groups and the financial services industry have been lobbying for over a number of years. The current rules, generally considered to be woefully out of date, can be found in the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561), and have remained largely unchanged since they came into force in May 1985.
The principal aim is to address the language used in notices to make those notices easier to understand for consumers, hopefully setting the bar at a suitable 'reading age'. Lenders will have some flexibility to use words that are more commonly understood. The new rules will also address formatting concerns: replacing mandatory block capitals with the use of bolding and underlining where prominence is considered necessary, whilst at the same time restricting the amount of information that must be prominent.
A new Statutory Instrument is expected shortly, and is expected to come into force in December 2020. Indications are that lenders will have a six month transitional period within which to make the required changes. The timing couldn't have been better, with an expected surge in enforcement activity going into 2021 on the back of the financial distress being suffered by millions of consumers as a result of the coronavirus pandemic. A relatively small but nonetheless significant change to the consumer credit regulatory regime that will be welcomed by all.
