July 4, 2025 - States approve legislation that introduces enhanced consumer credit protections

On July 4^, 2025, a significant step forward for Jersey’s financial landscape — the Financial Services (Jersey) Amendment Law 2025 — was unanimously passed by the States Assembly.

This landmark legislation introduces enhanced consumer credit protections under Jersey law.

The Draft Financial Services (Jersey) Amendment Law 202-  [P.41/2025] (hereafter referred to as the “Draft Law”)

• The Draft Law
• Is part of a proposed initiative to regulate consumer credit and associated activities, thereby strengthening the consumer credit protections provided for in Jersey law.
• It aims to provide clarity for consumer credit businesses, ensuring that Islanders maintain access to a wide range of financial products and services on the market.
• Reinforces Jersey’s commitment to upholding the highest standards of fairness and accountability in the financial services sector.
• Protect consumers from abusive lending practices and enable them to make well-informed decisions when using credit providers and other credit services such as credit advice, debt collecting and administration.
• The Government of Jersey will also be seeking to:
• Give clarity to businesses that will be regulated under the proposed regime;
• Ensure that the regime is practicable to implement; and
• Make sure the regime is compatible with existing regulatory requirements in neighbouring British jurisdictions.

YOU CAN READ THE FULL DEBATED PROPOSITION HERE: P.41/2025 – FINANCIAL SERVICES (JERSEY) AMENDMENT LAW 202‑

• https://statesassembly.je/publications/comments/2025/p-41-2025-com
•  https://statesassembly.je/getmedia/2ad04277-ec90-468b-a75b-c75753a4ecb6/P-41-2025-Com.pdf?ext=.pdf

BACKGROUND AND PROPOSED IMPLEMENTATION

1. In November 2024, following an extensive period of public consultation and involving multiple consultation papers, the Government of Jersey published:
   1. A DRAFT 'FINANCIAL SERVICES (JERSEY) AMENDMENT LAW 202' (DRAFT AMENDMENT LAW)
      1. https://www.gov.je/SiteCollectionDocuments/Industry%20and%20finance/LD%20FinancialServicesAmendmentLaw202-_Draft%2025.pdf
   2. AN ACCOMPANYING EXPLANATORY NOTE  
      1. https://www.gov.je/SiteCollectionDocuments/Industry%20and%20finance/LD%20FinancialServicesAmendmentLaw202-%20explanatory%20notes.pdf
   3. NOV 2024 CONSULTATION PAPER.
      1. https://www.gov.je/SiteCollectionDocuments/Industry%20and%20finance/C%20Consumer%20Credit%20Second%20Consultation%20Nov%202024.pdf
   4. MARCH 2025 CONSULTATION PAPER RESPONSE
      1. https://www.gov.je/SiteCollectionDocuments/Industry%20and%20finance/CR%20Consumer%20Credit%20Second%20Consultation%20Responses.pdf

THE PROPOSED REGIME

Who is a "consumer"?

1. Under the Draft Amendment Law, a "consumer" will be an individual who is acting for purposes wholly or mainly outside their trade, business, or profession or who has no trade, business, or profession.

What is "consumer credit business"?

2. Under the Draft Amendment Law, an entity will be carrying out "consumer credit business" if it carries out certain specified activities (each a Regulated Activity), including:

• • Entering into agreements as lender;
  • Exercising, performing, or obtaining the rights/duties of a lender;
  • Advising borrowers on lending agreements and arrangements; and
  • Related services including credit broking, debt adjusting, debt counselling and debt administration.

3. There will be several exemptions from the scope of the Proposed Regime in recognition of the Government of Jersey's efforts to ensure proportionality, including:

• • Activities in relation to family members;
  • Activities of certain persons in the United Kingdom (UK) or Guernsey, where such person is carrying on business from their place of business in the UK or Guernsey with a borrower in Jersey, and for which that person is already supervised to carry on that type of consumer credit business in the UK or Guernsey;
  • Activities in relation to lending by entities to connected persons; and
  • Providing an opt-out in relation to high-net-worth individuals (HNWIs), aligning with the position under the UK and Guernsey's consumer credit regimes.

4. In relation to the opt out available for HNWIs, a HNWI under the Draft Amendment Law will be one that had:

1. 1. In the calendar year before the year in which they enter into a consumer credit agreement, hire purchase agreement or conditional sale agreement:
      1. 1. Net income of £150,000 or more; or
         2. Net assets (excluding primary residence and other benefits payable if the individual's employment ends) worth £500,000 or more throughout the year.
   2. In the calendar year before the year in which they enter a secured lending arrangement:
      1. 1. Net income of £300,000 or more; or
         2. Net assets worth £3,000,000 or more throughout the year.

5. There are several other sectors specific carve outs and exemptions available, indicating that the new regime is really seeking to target the protection of consumers, not further or otherwise.

Obligations of an in-scope entity

6. Under the Draft Amendment Law, an in-scope entity will need to obtain a licence from the JFSC and once licenced, comply with relevant corporate governance requirements and principles that will be set out by the JFSC in a new Code of Practice in respect of consumer credit business, to be published and consulted upon in due course. 

7. A breach of the Draft Amendment Law will be an offence punishable by imprisonment for a term of not more than seven years, or a fine, or both.

Transitional provisions

8. The transitional provisions note that the Draft Amendment Law won't be enforced against:

• • Existing operators (i.e. persons who carried on consumer credit business at any time during the 12 months immediately before the commencement date) for 12 months after the commencement date if they stop carrying on consumer credit business by this date; and
  • Existing operators or new operators until their application is determined or withdrawn if they apply for registration within 6 months of the commencement date.

9. Additionally, a person will not be carrying on a consumer credit business if:

• • That person is carrying on a regulated activity pursuant to an agreement/arrangement entered before the commencement date; or
  • The regulated activity was carried on only before the commencement date.

Secondary legislation

10. The Government of Jersey, in due course, intends to consult on secondary legislation that will include unfair contract terms regulations and debt collection regulations, with a view to further developing consumer credit protection in Jersey. These regulations will be enforced by Trading Standards and will apply irrespective of whether an arrangement falls within scope of the FSJL or not.

11. At this early stage it is anticipated that the unfair terms regulations will contain a non-exhaustive list of prescribed terms which will be deemed to be unfair in most circumstances if included in an agreement or arrangement for credit and will include restrictions on matters such as the total cost of credit.

12. If a term is deemed as "unfair", it is anticipated that such a term will be deemed unenforceable and/or interest on the amount borrowed may also not be charged. This builds on and formalises customary law, where it is already the case that the Royal Court may decide not to enforce a contractually agreed interest rate to the extent that it is excessive or unreasonable.