UK Finance has published a blog post on resolving Section 75 claims made in relation to failed home improvements.
It explains that due to the significant number of contractors ceasing to trade each year (nearly 80,000), lenders and consumers continue to be exposed to risk. As a result, customers are turning to claiming via their lenders (credit card and point-of-sale companies) under Section 75 of the Consumer Credit Act.
Claims involving home improvement and renewable equipment can be challenging due to the complexity of this type of work. Coupled with the FCA’s continued focus on customer outcomes, lenders can often be exposed to a multitude of issues spanning operational matters as well as financial, compliance and reputational risks.
UK Finance say that the key to resolving claims of this nature is to act quickly by ensuring issues are independently validated by an expert appointed via lenders. By taking this step, lenders gain control of the situation and ensure that claims costs are managed from the outset. It also recommends utilising a contractor network that has the scale and capability to complete jobs consistently across the UK, achieving the most appropriate customer outcomes.
Given the scale of claims made, UK Finance query whether it is time for financial institutions to consider a new approach to Section 75 claims.