Right of Withdrawal and Data Sharing

Following the introduction of consumers being able to activate the Right of Withdrawal, there have been numerous discussions on how this should be reflected at the Credit Reference Agencies.

A proposed approach is set out below and we would welcome your comments by Friday 11 April 2025. The draft wording will then be considered for inclusion in the Data Quality Guide which sits alongside the Principles of Reciprocity.  

Update to suggested wording – March 2025

Right of Withdrawal – draft approach

If a consumer exercises their right to withdraw from a credit agreement within the first 14 days, the borrower must repay the credit and any interest that has accrued without undue delay, and in any event no later than 30 days after having given notice.
If the monies have been repaid within the appropriate timeframe, including where relevant any interest, the agreement should be deleted with the CRAs. Due to the timing of the account opening, and the debt being repaid, should this occur over 2 reporting periods, the record should still be deleted.

If the borrower does not repay the money within the 30 day time limit, or only partially repaid the amount due, the lender is entitled to take action to recover any monies outstanding, repossess the goods or enforce any security. It is considered a debt to the lender and should be reported to the CRA stating the exact position and if appropriate the relevant arrears information. For example:

• Report monthly arrears
• Report whole amount due
• Set up new agreement

In both instances the borrower is not liable to pay any other fees or charges (except the interest as stated above). The account should continue being reported to the CRA under the correct status and when the debt is fully repaid, the account should be settled/satisfied. It should not be deleted.

It is noted also that there may be certain circumstances where it is more appropriate for the record to be settled at the relevant CRAs, such as to ensure a good customer outcome under Consumer Duty, or on a specific legal point.  In such cases, the lender should work with those relevant CRA(s) in order to achieve that outcome. In addition and in line with Consumer Duty and achieving good outcomes for vulnerable customers, if lenders want to vary any time frames or processes explained above for vulnerable customers to repay their accounts, this is at the individual firm’s discretion/decision.

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