HM Treasury launches phase one consultation on reform of the Consumer Credit Act 1974
HM Treasury has launched a consultation on proposals to reform the Consumer Credit Act 1974 and accompanying statutory instruments. The Government aims to modernise a regulatory framework it describes as overly complex and unsuited to current market conditions, technology, and consumer behaviour. Consultation on reform will be delivered in two phases: Phase 1 sets out the overall vision and seeks feedback on changes to information requirements, sanctions, and criminal offences; Phase 2 will address consumer rights, the scope of regulation, key definitions, and necessary amendments to existing legislation, including the Financial Services and Markets Act 2000. Policy work on both phases will be carried out prior to implementing any changes. Transitional provisions will be introduced to maintain legal certainty and fairness during the transition to the new regime. The proposals call for a simpler, more agile, proportionate and outcomes-based framework providing firms with greater flexibility to achieve good consumer outcomes in line with the Financial Conduct Authority’s (FCA) Consumer Duty principle. Responses are sought by 21 July 2025.