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<p>The Government has made clear to lenders that credit data sharing is key to proper
affordability assessments and promoting a competitive market, and more progress on
recording and using payday lending data in real time is vital to addressing problems
around multiple loans.</p><p> </p><p>Having access to comprehensive real-time data
about their customers’ outstanding commitments may help avoid consumers taking out
a loan which they cannot afford to repay.</p><p> </p><p>The FCA has already made clear
to payday lenders and credit reference agencies (CRAs) in its policy statement, published
in February, that they must identify and remove any data sharing blockages involving
payday lenders as a matter of urgency.</p><p> </p><p>In its consultation on the cap
on the cost of payday loans, published in July, the FCA stated it expects to see more
than 90% of current market participants - by market share and volume of loans - participating
in real-time market-wide data sharing by November 2014, and more than 90% of loans
being reported in real time. In order to improve the coverage of real-time databases,
firms will also need to share data with more than one CRA.</p><p> </p><p>The FCA stated
that it will request information from firms and CRAs in order to get an accurate picture
of whether the standards it has proposed have been met by November. If the FCA does
not see sufficient progress by November or CRA coverage does not improve, it will
consult on the introduction of data sharing requirements. It has also placed a requirement
on firms to provide product sales data on high-cost short-term credit agreements every
three months once they are authorised.</p><p> </p><p> </p><p>Credit reference agencies
must ensure that that their use of personal data is compliant with the Data Protection
Act 1998 (DPA). The Information Commissioner’s Office is an independent UK supervisory
authority that oversees and enforces compliance with the DPA.</p>
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