On 1 April, the Financial Conduct Authority takes over regulation of consumer credit from the OFT. If you have an OFT licence then the FCA will have written to you to tell you to register with them before 31 March. If you want to carry on offering credit to your customers and haven’t registered with the FCA for ‘interim permission’ you may be acting illegally.
The Financial Conduct Authority (FCA) takes over regulation of consumer credit from the OFT from 1 April, this year.
Which firms need to take action?
All firms with an OFT licence must contact the FCA to register for ‘interim permission’. This allows firms to continue providing credit to customers. If your business sells goods or services on credit, you almost certainly need to be licensed by the OFT.
What do firms need to do?
Consumer credit – three step plan for firms with up-to-date OFT licences
Register for interim permission – click here www.fca.org.uk/clicked
Pay the online fee – £350 for most firms and £150 for sole traders
Wait until the FCA contacts you to apply for full authorisation.
The FCA will be publishing its final rules on how it intends to regulate consumer credit before April. You can sign up for emails to get the latest news from the regulator here.
What happens if you don’t do anything?
If you have an OFT licence and don’t register with the FCA by 31 March 2014, you cannot legally continue with consumer credit related activities in April.
If you haven’t got an OFT licence but think you should have one.
You should apply to the OFT. After 1 April, you will have to register with the FCA.
What are the consequences of providing credit without an OFT licence or authorisation from the FCA in the future?
This is likely to be a criminal offence and it may mean that agreements you make are unenforceable.
What about if you introduce customers to lenders?
This is one of the areas that is likely to change when the FCA takes over. If you introduce individual customers to businesses that are lenders – credit brokering – you will have to be authorised by the FCA in the future.