The new head of the Finance & Leasing Association (FLA) has urged reform of the 45-year-old Consumer Credit Act because it "is failing consumers" and is unfit for modern finance provision.
The FLA wants the incoming Government to adopt three improvements that it believes will "transform customer protection in the consumer credit market, and strengthen the growth of a sustainable and productive economy".
Stephen Haddrill, director general of the FLA said: “Government should reform the CCA urgently, rather than continuing to turn a tin ear to those in financial difficulty, or those trying to help them.
"Consumers need to be given a credible, firm promise of legislation early in the new Parliament; legislation that will deliver protections appropriate for the 21st century.
“Although there is no shortage of online business advice, it’s less clear whether a small business owner could find, in one sitting, all of the information needed to decide on the appropriate finance for their circumstances. Remedying this would be a great step to improving UK productivity.”
In the FLA's 'Priorities for 2020' and Beyond' document it highlights that the 45 year old Consumer Credit Act (CCA) has not kept up with the innovations in the motor finance sector that could help to increase uptake of low emission vehicles.
Currently, financing a vehicle and its charging point in the same transaction is "unnecessarily complex", said the FLA.
And as the law which underpins every consumer credit transaction in the UK, it requires lenders to send old fashioned and severely worded letters to those in financial difficulty, the FLA said, and it actually delays how quickly lenders can step in to offer those customers more time to make payments.
And the FLA called for the UK’s patchwork of information to be "streamlined" into one single, intuitive source that can diagnose the type of finance needed, signpost where to find it, and provide links to local growth hubs where the quality of business advice is consistent across the country.
Finding the right finance at the right time is vital for small businesses to grow and thrive, but the reality for owners is that the search for finance often starts at the end of the working day, it said.