Reporting on Hardship Practice in the Consumer Credit and Energy Sectors: An Analysis

Abstract

Reporting is a critical regulatory strategy used to provide insight into the level and quality of service providers’ compliance with legal obligations in a regulated sector. Transparent reporting is particularly important in the area of hardship practice, where the legal protections for consumers experiencing payment difficulties leave service providers in the consumer credit and energy sectors with significant discretion over when and how to provide assistance. In this article, we undertake a comparative analysis of the legal frameworks for reporting on hardship practice in these sectors. On the basis of this analysis, we make recommendations for the implementation of a new set of performance indicators for the consumer credit sector, to supplement its existing breach reporting framework. Our recommendations draw upon the example of the energy sector to adopt elements of what is known as a ‘principles-based’ approach to reporting, which aims to look beyond the effectiveness of credit providers’ internal compliance systems, and into the extent to which their hardship practices are achieving the consumer protection objectives of the regulatory framework itself.

Keywords: consumer law, financial hardship, reporting