News Article

Consumer Credit

CSA urges final response to PAP Consultation

By CreditMan Wednesday, January 6, 2016

The Credit Services Association (CSA) is urging its members to engage with the Ministry of Justice (MoJ) as the deadline to the MoJ’s consultation on Pre-Action Protocol (PAP) comes to a close on January 11.

Leigh Berkley, President of the CSA believes that a separate PAP for Debt Claims is completely unnecessary, especially since 90% of claims issued go uncontested: “As the proposal currently stands, PAP is onerous, costly, and potentially detrimental to customers, repeating actions and providing documents already available to the customer throughout the collections process,” he explains.

“We have argued that a better use of time would be to provide customers with clear information about what they can expect from the court process.”

The CSA says the PAP is excessive (it currently runs to 17 pages), and should be reduced. Too much paperwork, it argues, is often ignored by the consumers it is designed to protect. It also says that the requirements to provide copy documents such as the credit agreement and statements of account are unduly onerous to the creditor and only necessary where a claim is defended.

“Consumers, in the vast majority of cases, will have already received this information if they needed copies,” Mr Berkley continues, “and whilst the reply form attempts to reduce the amount of paperwork, it is likely that some consumers will simply ask for all the listed items.

“The timings are also excessive,” Mr Berkley adds, “especially where the consumer has indicated that they are seeking debt advice which cannot be obtained within 30 days. The current draft states that the creditor must allow ‘reasonable extra time’, and therefore potentially open to abuse or challenge. What is meant by reasonable? We would welcome our members’ suggestions on more workable timescales, so that these can be proposed to MoJ, and given due consideration.”

Mr Berkley says that despite strong representations from the CSA and other interested parties, the MoJ appears keen to drive the PAP for Debt Claims forward: “Whether members are responding to the consultation direct, or via the CSA, we would welcome their thoughts in advance of the deadline,” he concludes.

“Allowing the latest consultation to pass through unchecked would be to the detriment of consumers, and the wider industry.”