The chair of the Solicitors Regulation Authority has said the end is in sight of its “long, long journey” on consumer credit after a last-minute deal with the Financial Conduct Authority.
Vulnerable people could lose out under the latest plans by the Solicitors Regulation Authority for the regulation of consumer credit work, the Legal Services Consumer Panel has warned. Meanwhile the Law Society called for greater clarity on payment of legal fees by instalments.
The Solicitors Regulation Authority is set to continue regulating most consumer credit activities carried out by law firms after new proposals were issued last week. A consultation said solicitors would be able to carry out mainstream consumer credit activities as long as they are central to the legal services they provide.
The government has reduced the scope of regulation for law firms involved in consumer credit work, such as debt collection. It has also increased the ability of firms to offer payment by instalments.
The regulation of solicitors’ consumer credit work by the Financial Conduct Authority has been postponed again. It has agreed to an SRA request extent the current transitional arrangements until 31 October.
What’s your favourite time of year? Mine is April, but not this year. Other are conspiring against me—the Solicitors Regulation Authority, the government, the Legal Services Board, the Legal Ombudsman, HM Treasury and even the European Commission.
Law firms should issue two separate retainers to clients where they are provided with consumer credit as well as purely legal services, the Legal Ombudsman has suggested.
The Legal Services Consumer Panel has thrown its weight behind the Solicitors Regulation Authority (SRA) in arguing that it should no longer regulate consumer credit work.
The Solicitors Regulation Authority has recently published a consultation paper on the regulation of consumer credit activities. There are three principal areas of concern: law firms undertaking debt collection and other work on behalf of clients under part 20; law firms giving clients time to pay their legal fees; and the SRA’s rationale for its proposal and what it perceives to be good for the consumer.
The Solicitors Regulation Authority has said it may have to stop regulating consumer credit work, such as debt collection, from next April. The regulator said it was aware that around 1,100 firms were involved in debt collection.