CCPC welcomes commencement of Consumer Credit (Amendment) Act 2022
November 18, 2022
The Competition and Consumer Protection Commission (CCPC) welcomes the commencement of the Consumer Credit (Amendment) Act 2022 (the “Act”) in relation to high-cost credit providers. The Act introduces some new regulations and protections in respect of high cost credit providers, including measures which aim to modernise and streamline the sector, and for the first time allows the capping of simple interest rates.
The main changes introduced include:
- Replacing terms such as “moneylender” and “moneylending” with “high cost credit provider” and “high cost credit”
- The capping of simple interest rates charged by high cost credit providers. They can now charge a maximum of 1% per week or 48% per year (except for “running accounts” where the cap is 2.83% per month)
- Applying a maximum term of 52 weeks in the case of high cost credit provided as a loan (rather than a running account)
- Prohibiting high cost credit providers from charging for collection services
- Allowing repayment books to be maintained online
- Streamlining the licensing process for high cost credit providers
Kevin O’Brien, member of the Competition and Consumer Protection Commission (CCPC), said:
Return to News“The CCPC welcomes the provisions under the Act to provide better protection for consumers using high cost credit, and to modernise and streamline the sector. For most consumers credit is a necessary part of life. However, when credit is used to cover essential everyday expenses, it is linked to lower financial well-being. Where consumers access high-cost credit, they should consider alternative lower-cost options that may be available to them. Paying for items such as accommodation, food, heating or medical costs through high-cost credit is unlikely to be in a consumer’s best interests, and such consumers should be aware of services, including debt counselling, provided by the Money Advice and Budgeting Service.”
