To help reduce problem debt and the resulting consumer harm, from 1 October 2021, directors and senior managers of companies that provide consumer credit must be certified as “fit and proper” to provide this service.

This means they’re deemed financially sound, honest, reputable, reliable, and competent to do the job. There are also new due diligence requirements for directors and senior managers to take reasonable steps to ensure that, if a business is providing consumer credit, there are procedures in place to make sure its obligations under the law are being met.

In addition, there are new requirements around:

• What needs to be disclosed and when, in relation to consumer credit contracts

• How a lender must assess suitability and affordability when a borrower is entering into a loan, and

• What information lenders must include in their advertising

These changes were originally due to commence on 1 April, but were delayed due to Covid-19. To read about the changes in full, click here.