Registration & Licensing

Credit

If you are a Business that offers credit or lends money to consumers, The Consumer Credit Act 1974 may require you to be licensed. This includes where credit is arranged to finance the purchase of goods or services (brokers), and also applies to debt collectors, debt advisors and businesses that offer goods for hire or leasing.

Failure to have appropriate licensing arrangements in place where required could constitute a criminal offence, and may render any credit agreements you make unenforceable.

Important Changes To Licensing

Credit licensing is currently handled by the Office of Fair Trading, however on April 1st 2014 this will change and licensing will be taken over by the Financial Conduct Authority. All licenses currently issued by the OFT will become invalid after March 31st, 2014. If your business wishes to continue credit activities after that time, you will need to apply for interim permission from the FCA. These interim permissions will be available from towards the end of 2013.

From the middle of 2014, the FCA will then start looking at whether to grant businesses that have interim permission, full authorisation to carry on consumer credit activities, which should be complete by April 2016.

If you think your business may require a new Consumer Credit License before March 31st 2013, or you would like to know more about credit businessesā€™ obligations, please visit the website of the Office of Fair Trading.

For more information about the change of responsibility from the OFT to the FCA and what your business will need to do to continue consumer credit activities after March 31st 2013, go to the Financial Conduct Authority site. You can register for interim permission here. You will also need to visit the FCA if you do not need a Consumer Credit License until after April 1st 2014.