New FCA Regulations

The Financial Conduct Authority (FCA) will take over regulation of consumer credit (hire purchase, credit card issuers, payday loan companies, pawnbrokers, debt management, debt collection firms and providers of debt advice) on 1 April 2014 bringing all firms that carry on regulated consumer credit activities into one regulatory regime, including our authorisation, supervision and enforcement processes.

The 1st April 2014 will mark the beginning of a very different regime in a licensed debt collection industry, with the greater supervision and enforcement of standards. FCA claims to have stronger powers and more resources than the Office of Fair Trading (OFT) to regulate the consumer credit industry. Firms will have to comply with the Principles for Businesses, such as Treating Customers Fairly, from 1 April and we, as well as our customers will feel the difference under the FCA regime from day one.

All firms that currently hold an OFT licence and want to continue to carry out consumer credit activities after 1 April 2014, must register for interim permission by 31st March 2014. CCICM has applied for an Interim permission on 11/09/2013 and a copy of the confirmation can be provided upon a request. This permission will cover CCICM until we have to be ‘authorised’ by the FCA. Authorisation is the FCA’s equivalent of the Office of Fair Trading’s (OFT) licensing system, and consumer credit firms will have to follow a similar process to other financial firms to apply for authorisation. All firms will have to demonstrate that they meet the FCA’s minimum standards to become authorised – known as the ‘threshold conditions’. The threshold conditions are modified depending on whether the firm poses a higher or lower risk to consumers.

At the end of February 2014, the FCA published their Policy Statement – Detailed rules for the FCA regime for consumer credit called ‘CONC’. Most of the CONC rules will come into effect from 1 April 2014, on the basis that the FCA is carrying across existing CCA provisions and OFT guidance. In areas where the FCA is introducing new rules, the FCA is providing specific transitional periods to enable firms to amend systems and procedures. Non-compliance is not an option for firms at any time and the CCICM team has been working hard to ensure that we are ready for the transition and that the change in the regulator will bring better outcomes for our customers.