Check your Consumer Credit Licence – urgent!

legal updates

If your business does any form of debt adjusting you must have 'Category D' on your credit licence.

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In a report by Automotive Compliance, it is suggested (by them) that up to 75% of car dealers do not have the necessary accreditation to transact under changes to the Consumer Credit Licence system.

If your business does any form of debt adjusting (paying off finance on part ex cars) you must have ‘Category D’ on your credit licence.

If your business engages in the provision of debt counselling then your credit licence must have ‘Category E’ on it.

In almost all cases Category E will need to appear on your licence if you pay off a customer’s finance for them because you will have advised (ie counselled) your customer about doing so.

It is especially important that you check now and if not have them added to your licence by the OFT by the end of August.

This is because from April 2014 credit licensing will be transferred away from the Office of Fair Trading and to the new Financial Conduct Authority (FCA).  But in September of this year the FCA will be contacting car dealers to register with them for ‘interim permission’ to continue using their credit licence.

You should therefore check your Credit Licence now because incorrect or incomplete licences may result in those interim permissions not being granted by the FCA  – this could cause great disruption to your business.

Where the FCA grants an interim permission all current credit licence holders will need to make a full submission to carry on using their licence post April 2014.

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