Regulating the consumer credit market: Protecting vulnerable consumers

This chapter seeks to demonstrate that the close scrutiny of the conduct of authorised financial services providers can be an effective way of protecting consumers, without restricting access to credit products. Since becoming the regulator of the consumer credit market, the Financial Conduct Authority (FCA) has taken active steps to curtail the detriment caused by the high-cost credit market. To reduce consumers harm caused by financial institutions, the FCA embarked upon a war on harmful financial products. Ironically, the foundations of predatory lending are found in legislation originally designed to prevent such practices, end redlining and increase consumer’s access to credit. In the context of the United Kingdom credit market, the FCA undoubtedly has the potential to protect consumers towards the upper end of the vulnerability scale, particularly when compared with the Office of Fair Trading. The United States model includes enforcement provisions from consumer, credit and criminal law.