FCA has announced a market study looking at how the credit information market operates and its impact on consumers, and has published terms of reference. Christopher Woolard said FCA is concerned abou the coverage and quality of credit information, competition between CRAs and the extent of consumer engagement. It notes the benefits of a well-functioning credit information market for retail lenders and consumers alike. Although there is no requirement on them to do so, 96% of lenders use at least one CRA.
The study will relate to lending to individuals and will focus on:
- the purpose, quality and accessibility of credit information – including whether vulnerable customers are disproportionately affected by the way credit information is used;
- the market structure, business models and competition;
- consumers’ engagement and understanding of credit information and its impact on their behaviour; and
- the future evolution of the market.
FCA welcomes comments on the terms of reference, although it is not formally consulting on them. It plans to start gathering information from relevant parties and to publish its preliminary conclusions in Spring 2020.