The Financial Conduct Authority (FCA) has reminded consumer credit firms that they need to change their loan contract forms by 1 June or they may no longer be enforceable.
The move could impact consumer lenders such as Zopa, Lending Works and Lendable.
The change is a result of Brexit.
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Until 31 May 2021, firms engaged in entering into consumer credit regulated distance contracts can use a standard European consumer credit information form.
But once the transition period ends, it will change to a new post Brexit pre-contract credit information form.
This removes any references to “your member state of residence” and substitutes it with “the United Kingdom.”
“These changes will need to be made from 1 June 2021,” the City watchdog said.
“If they are not made, the credit agreement may only be enforceable against the debtor on an order of the court under the Consumer Credit Act 1974.”
It comes as consumer credit lenders now have to start providing tailored support for borrowers after the deadline to apply for a payment deferral passed.
Only consumers who were still on a payment deferral arrangement on 31 March will be able to extend their payment deferral beyond that date, and all deferrals under that guidance will end by 31 July 2021 at the latest.