With everything else that is happening on the regulatory front, it is important to remember that the SECCI (Standard European Consumer Credit Information) must be replaced very shortly.
The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 came into force on 30 December 2020 and mean that firms must ensure any references to the SECCI in their documentation are removed by 30 May 2021.
The pre-contract information will remain with us, however, by virtue of Section 55 of the Consumer Credit Act 1974, which stays in place and requires disclosure of specified information ‘in the prescribed manner’ before a regulated consumer credit agreement is made. The Consumer Credit (Disclosure of Information) Regulations 2010 (the 2010 Regulations) continue to prescribe the form and the information required to be disclosed, as well as the manner of disclosure.
What do you need to do?
You should stop using the SECCI and update your pre-contract documentation to comply with the new prescribed form. Systems and customer communications should also be reviewed so that all references to SECCI are updated. We are currently in a transition period so you can make the switch any time between now and 30 May 2021.
What changes do you need to make?
These are very straightforward. Firstly, any references to “SECCI” in your document suite must be deleted and replaced with “Pre-contract Consumer Credit Information”.
The prescribed form of the Pre-contract Consumer Information differs very little from the form of the SECCI. Essentially the required changes are that:
- the heading will need to be amended by deleting “Standard European Consumer Credit Information” and replacing it with “Pre-contract Consumer Credit Information”
- any references in the form to “your Member State of residence” should be deleted and replaced with “the United Kingdom”.
Further, if any of your credit agreements or supporting documents make reference to the SECCI, this should also be deleted.
Whilst the changes are minor, we are happy to help you with implementing them if you need assistance. It is vital that they are implemented by 30 May 2021 as use of the old-form SECCI after that date will result in agreements not being properly executed.
Are more changes to consumer credit in the pipeline?
We are expecting to see further changes in consumer credit in the next few months. These will include further detail on the mechanics of Breathing Space, the implementation of changes to default notices, changes to the regulation of cross-border finance and the work that the FCA have announced on exempt agreements to cover “Klarna-type” by-now-pay-later arrangements. This is in addition to the FCA’s ongoing review of the retained provisions of the CCA.