The regulation of Consumer Credit has been in the hands of the Financial Conduct Authority for 3 years. An additional 50,000 firms have been regulated by the FCA, many of which had little experience of FCA regulation prior to April 2014. These firms have a variety of primary purposes: many sell goods on credit, some are voluntary institutions who help manage debt, and others allow people to pay in instalments for fees (e.g. private schools.) Then there are payday lenders and pawn brokers. Those categories of business are just a sample, the FCA state that there is £200 billion of consumer credit in the UK so the regulation of this sector is a significant undertaking by the regulator*.
The FCA has been pro-active in the task of regulation, publishing several consultation documents and new rules for this sector. They also assess new firms who want to work in this sector and that application process can be quite complex.
Some firms have found the jargon difficult: How will your firm treat customers fairly? Do you need limited or full credit permissions? Who will be the controlled person in your organisation? What is your policy on preventing financial crime? What Training and competence do you have in place for staff? What is your vulnerable customer’s policy?
We have dealt with enquiries from motor traders, finance brokers and hire companies, and so we have knowledge of the Consumer Credit Rulebook. We have also helped firms with the application process for Consumer credit. The majority of the FCA rules are common to all firms, but there are some rules specific to this sector.
Our help need not be limited to the application process although this may be your number one priority. There are many specifics relating to consumer credit that we could help with, such as financial promotions (advertising and social media.) There are also the policies and procedures that are required as a regulated firm and the keeping up to date with those rules as the FCA make changes.
As part of our initial visit we will work together to assess your needs and then we would provide you with a compliance support plan. If there are urgent development points then we would prioritise those. If you are looking to be authorised for the first time we will discuss with you what is required and how to apply – we can even guide you through the process
*Source FCA web site dated 1/4/2014: “FCA takes over regulation of consumer credit firms – research shows 9m people are in serious debt and 1.8m in denial”