HM Treasury launches Phase 1 consultation on Consumer Credit Act reform including repeal of disclosure rules and automatic sanctions

HM Treasury has published a Phase 1 consultation on its proposals to reform the Consumer Credit Act 1974 (CCA), setting out a two-phase programme to modernise the consumer credit regime. Phase 1 seeks views on reforms to information requirements, sanctions and criminal offences, with the Government aiming to create a simpler framework that maintains robust consumer protections while being more proportionate and supportive of innovation. The proposals centre on repealing the CCA’s prescriptive information provisions and much associated secondary legislation, with conduct and disclosure requirements to be recast, where appropriate, into Financial Conduct Authority (FCA) Handbook rules informed by the FCA’s Consumer Duty. Phase 1 also proposes removing the CCA’s automatic sanctions linked to information breaches, including unenforceability and disentitlement to interest and default sums, on the basis that the FCA regime, the Financial Ombudsman Service and the court process provide sufficient consumer protection. On criminal offences, the consultation asks whether offences in the CCA should be retained or repealed, including options to keep offences relating to minors and canvassing off trade premises. The consultation closes on 21 July 2025. HM Treasury expects implementation to require primary legislation, FCA rulemaking and transitional arrangements, and indicates a preference to use a single primary legislative vehicle to deliver both phases, subject to Parliamentary time; Phase 2 will consult in due course on scope, definitions, and rights and protections such as section 75 and section 140A, alongside an impact assessment for the overall reform.