On the 1st April the Financial Conduct Authority (FCA) took over responsibility for regulating consumer credit activities from the Office of Fair Trading (OFT). The introduction of authorisation and more rigorous legislation presents both a challenge and opportunity for the home improvement industry. After quickly recognising the impact on businesses, Consumer Credit Solutions (CCS) initiated a UK-wide communication programme to visit every client and help support them through the changes.
Companies providing consumer credit before the 31st March 2014 should have already applied for interim permission allowing them to continue. However, in due course they will have to apply for full authorisation from the FCA. As part of the application process, businesses will be categorised as conducting either high or low risk credit activities. Any company offering credit products in customers’ homes will be automatically classed as ‘high risk’ and this means the application process is more rigorous.
A recent survey found only 37 percent of businesses felt confident they were ready for the new regulations and 98 percent agreed that regulation under the FCA will be more challenging than under OFT.
The new regulations have been designed to tighten-up sales practices and provide further protection for consumers. As part of the application, businesses will have to provide a business plan, profit and loss accounts, and details about its systems and controls, such as complaints handling procedures. It is expected to take up to six months for the FCA to approve new applications.
CCS Managing Partner Andy Wallace said, ‘We recognised very early on that many businesses would find the changes daunting. So over the last few months the team has been busy visiting all our clients to help them understand the implications of the new regulations so they can make informed business decisions.
‘CCS fully support the FCA’s initiatives, particularly its mission to ensure consumers are always treated fairly. I feel that the new regulations could actually help strengthen many businesses in the industry and companies shouldn’t be put off by the lengthy application process. Consumer credit products are a key sales tool and can increase turnover by 25-33 percent.’
CCS has created a free FCA Application Checklist. To download a copy please click here www.creditsolutionsgroup.co.uk (bottom right of the screen)