Consumer Credit Regulation

Since 1 April 2014, the Financial Conduct Authority (FCA) has been responsible for the regulation of consumer credit activities, in place of the Office for Fair Trading (OFT).

If you offer credit facilities to consumers, such as:

  • offering goods or services for hire or on credit, which includes when payment is deferred by agreement
  • lending money to consumers
  • providing debt solutions and advice to consumers
  • introducing consumers to lenders as a main business activity

you will be carrying on consumer credit activities and therefore now regulated by the FCA.

What does that mean in practice?

It means first of all that you should have applied for interim permission from the FCA to carry on the consumer credit activities covered by your previous OFT licence.

However, that is not the end of it. You are now subject to the FCA's Principles for Business, and the new rulebook for consumer credit, the Consumer Credit Sourcebook (referred to as CONC), and the FCA’s financial promotions regime in relation to your advertising.

This means that you will need to be familiar with and comply with all these rules.

In addition, you will need to apply to the FCA for full authorisation to carry on your consumer activities by 31 March 2016.

The FCA has said that it plans to carry out further research into the consumer credit market – via thematic reviews or market studies – and that it likely to result in it identifying a need for new rules and guidance.

Finally, you should be aware that the FCA is likely to enforce its rules rigorously – it has tough enforcement powers which it can use against firms it regulates which fail to comply with its rules.

How we can help

We can offer the following services:

  • an opinion on the compliance of your financial promotions
  • an audit/redraft of your consumer credit documentation and procedures, pre-contract to default
  • advice on the consequences of and remedies for any events of non-compliance you may have identified

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