by Andy Wallace | Managing Partner
It’s fair to say the FCA’s take-over of consumer credit regulation on the 1st April has caused a few ripples across the industry. Change tends to cause apprehension, and many retailers are uncertain about what FCA regulation will actually mean for their businesses; will it be a drain on resources and can they expect a knock on the door if they get something wrong?
But it’s my personal belief that if you have a business that puts the interests of customers first and plays by the rules, then you should have little to fear from the FCA. In fact, the FCA’s objectives are likely to be good for business and its aim is simple – to ensure customers are always treated fairly and are not misled in any way.
How regulation benefits retailers
Personally, I feel that stronger regulation will help customers to make more informed choices when making purchases and have a lot more confidence in understanding the various finance options potentially available.
And because sales representatives are now expected to take every customer through all the different ways to pay, including all the credit options, then I feel the uptake of credit and therefore the impact on overall sales and order values will be very positive. If you’re only able to offer a customer a cash option then it’s highly likely many will want to go away and think about it. Having more options means sales representatives are more likely to close deals on the day.
The value of FCA authorisation to your business
Recent surveys have highlighted that millions of households have no access to savings. So it’s almost become an imperative for businesses to offer reasonable monthly repayment options. It allows customers to buy products who would otherwise be priced-out.
Of course, low rate, interest free and buy-now-pay-later products are also very attractive to customers with savings. It means they can leave their nest eggs where they are and it offers them protection under the Consumer Credit Act 1974. For those retailers without a credit offering, therefore, it’s hard to conclude they’re actually maximising all their sales opportunities.
Applying for your authorisation & how we can help
If your business previously held a Consumer Credit Licence and it wanted to continue offering credit then you should have applied for ‘interim permission’ before 31st March 2014. In April the FCA contacted all interim permission holders to give them a ‘landing slot’ that outlined a 90 day window to complete the application for full authorisation. The online form is detailed, but don’t let it put you off and, of course, we’re here to help.
Our team has produced an ‘FCA Authorisation Toolkit’ for clients, and it includes guidance on how to complete your application and how to maintain business compliance. If you’d like more information, please contact your CCS Business Development Manager or the Head Office team on 0845 120 6666.