Government extends Consumer Credit Act

The government has recently extended the Consumer Credit Act in the UK, which will give the Financial Ombudsman Service greater scope and power to deal with consumer complaints relating to financial services and products. In the past the type of complaints that could be dealt with by the Financial Ombudsman Service were restricted, but this extension to the Consumer Credit Act will increase the ability of the FOS to deal with a far wider range of financial complaints.

Many more companies and services that offer credit and finance, such as hire purchase agreements, are now under the regulatory umbrella of the Financial Ombudsman Service, and all have been advised that in the event that a consumer makes a complaint to them that cannot be resolved the company must now advise them that they can take their complaint to the FOS.

Amongst the types of financial products and services that the FOS will now be able to deal with are hire purchase, store cards, and payment plans. FOS officials have warned, however, that they cannot be the first point of contact for a complaint about these services, and the consumer must attempt to resolve the issue with the service or product provider first before approaching the FOS with the complaint.

Certain restrictions will also apply with regards to which complaints can be dealt with by the FOS. The loan or credit agreement must be for a maximum amount of £25,000, although it is likely that this limit will change in due course. Also, the complaint must result from a service or products taken after 6th April 2007.

Tom Smith
10th June 2007