Bringing the House down – a blog by Philip King
24 July 2014
Two pieces of great news in the past week, and a couple of challenges to accompany them.
The FCA has launched its consultation on the proposals for a price cap for short-term high-cost credit. On a quick read, the cap which will be introduced in January 2015 makes sense and will reduce the opportunity for consumers to be exploited. What I don’t understand is why bank overdrafts are being excluded. I gave an example when I was interviewed on Jeff Randall Live on Sky News earlier in the year of a High Street bank whose short-term overdraft charges were more punitive than those of payday lenders, and the journalist Paul Lewis tweeted similar examples last week where bank’s overdraft charges were well outside the proposed cap levels.
I know the Competition and Markets Authority is reviewing the personal current account market, and this includes overdrafts, but surely it makes sense for all short-term high-cost to be covered by the same measures and the decision to leave them out of scope seems indefensible to me.
The second piece of great news was the announcement that Companies House will be making all its digital data available free of charge. This will include basic information about a company, accounts information, information on appointments and charges, and information about other events in a company’s life that are registered at Companies House.
This will come into effect in the second quarter of 2015 and will make the UK the first country to establish a truly open register of business information. This is a landmark decision that will allow businesses to access data about potential customers easily and freely. It will provide the opportunity to verify company names and details, and look at accounting information, prior to making supplies on credit, something that all too many small businesses currently fail to do.
My hope is that this will lead to an increase in the number who invest in more meaningful credit reference data prior to accepting businesses as customers and supplying them. The assertion that small businesses have no choice and have to supply larger business is one that continues to frustrate me - every business decision is a choice.
The challenge here is how we make sure businesses are aware of the information that will be available to them, where they access it, and how they can best use it. Unless we can meet that challenge, the landmark decision will deliver little benefit.