Financial Regulation : Reforming The Consumer Credit Regime

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“Most people, about 60%, manage to ‘make ends meet’ but they do not have the resilience to weather financial shocks. As a result, they can easily be knocked down the staircase by an unexpected or unplanned event. It is well known that two thirds of people who fall into serious debt problems do so because of some form of income shock.”(Money Advice Service, 2014) In 2010, Her Majesty’s (HM) Treasury and the Government’s Department for Business Innovation & Skills(BIS) conducted a joint consultation entitled: A New Approach to Financial Regulation: Reforming The Consumer Credit regime. (HM Treasury, 2010) The consultation paper aimed to tighten the consumer credit sector following the 2008 financial recession, numerous campaigns by several agencies such as Debt Plan, Citizen Advice Bureau (CAB) StepChange and Money Advice Service (MAS), since debts increased debts among the financially vulnerable. (BSA, 2010; CAB, and HM Treasury, 2010) Customer vulnerability became a focal concern of the UK government and financial authorities due to the increased number of people that are excluded from basic financial services since the 2008 financial recession and the potential impact to the recovery of the country’s economy. (FCA, 2016; and Coppack et al, 2015) While the Financial Conduct Authority (FCA) defines a vulnerable consumer as: “Someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate
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