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Legislation & Litigation

Equifax urges industry-wide collaboration to meet FCA and CMA expectations for real-time data sharing

By CreditMan Friday, October 24, 2014

Leading consumer indebtedness insights expert, Equifax, is urging the short-term lending sector to accelerate plans to share customer data. The Competition and Markets Authority (CMA) last week (9th October 20104) published its report on payday lending including recommending the development of real-time data sharing to help new entrants better assess credit risks. The Financial Conduct Authority’s (FCA) November deadline for greater real-time data sharing is also fast approaching.

“The FCA said in its July report that effective real-time data sharing with credit reference agencies is needed to address the issue of consumers running multiple short-term loans that they cannot afford from different lenders”, explained Craig Tebbutt, Head of Alternative Lending at Equifax. “Last week’s CMA report further endorsed the need for real-time data sharing.

“We believe that the only real way to ensure that individuals do not get into a spiral of debt – using one loan to pay off another – is the real-time sharing of key information over the entire credit cycle. This includes account openings, account management and account closure. We also believe that real-time should mean exactly that – data should be shared by and made available to other lenders within 60-90 seconds of any key milestone in the credit lifecycle.

The recently launched Equifax Real-time Exchange has been developed in partnership with LendingMetrics, the short-term lending and real-time data specialist, to help the short-term credit sector meet the FCA’s requirements. Unlike other systems that update hourly or daily, it enables the sharing of data in genuine real-time and will provide greater predictive capability for short-term lending decisions, helping providers across the sector to extend credit more responsibly.

Equifax believe that the Equifax Real-time Exchange can encourage comprehensive data sharing within the sector, helping enable all lenders to deliver better outcomes for consumers.