If you deal with individuals or unincorporated businesses these activities are likely to fall within the ambit of the Consumer Credit Act 1974. From 1st April 2014 you will require permission from the Financial Conduct Authority (FCA) to continue with these activities.
It may be that you already hold a credit licence granted by the Office of Fair Trading. If so, you should already have applied to the FCA for interim permission. The regulatory regime is changing, and new fees and authorisations are being put in place.
The FCA has not yet finalised how it will deal with applications under the new regime, but they have indicated that they will take the following into account:
- How you are structured in terms of business model, ownership and key personnel;
- Your financial standing;
- Any regulatory arrangement in place for a particular industry, which may affect the type of permission granted, and
- The extent and nature of credit activities.
New permission holders will be required to comply with the FCA’s existing Principles of Business, and the detailed rules which will be set out in the new consumer credit rulebook to be published later in the year. Businesses in breach of the requirements will find themselves subject to the FCA’s wide enforcement powers, including the power to issue fines and to ban individuals from working in consumer credit activities. Authorisation may also be withdrawn altogether.
As existing holders of a Consumer Credit Licence, we are familiar with the application process and the applicable criteria and can provide time-saving advice in relation to both the documentation required and adequate internal compliance.