FCA Introduce New Rules

At the start of 2015 the Financial Conduct Authority (FCA) introduced new rules to protect consumers from harmful business practices adopted by fee-charging brokers.

Payday Pig never charges a fee for the service we provide and we never take money from your account. However some brokers do charge a fee, and some mislead the consumer about these fees.

“The rules will ban credit brokers from charging fees to customers, and from requesting customers’ payment details for that purpose, unless they comply with new requirements ensuring that customers are given clear information about who they are dealing with, what fee will be payable, and when and how the fee will be payable. The rules come into force on 2 January 2015.”

Move over OFT, here comes the FCA…

A big shake up in the way the short term lending industry regulates its business is being introduced.  This is a very welcomed and positive move which has been well received within the industry.

As of 1st April 2014 the Office of Fair Trading (OFT) transfer its powers regarding Consumer Credit Firms to the Financial Conduct Authority (FCA).

All Credit Consumer businesses must apply for authorisation to continue with their activities to the FCA by April 2014.

The improved policies offer increased consumer protection and introduces a more regulatory approach with companies.  The benefits require companies to conduct their business with integrity, communicate clear information to the client and financial prudence to mention but a few.

Whilst not quite in place yet, the process will also apply to the majority of European Economic Area countries (EEA) who wish to conduct consumer credit activities within the UK.  Management presence in the UK for example will be required to comply with Threshold Conditions.

The main purpose for this new directive is to increase consumer protection and introduce a more regulatory approach with companies.

Change is not without its challenges and with those changes come several compliance and operational requirements which must be followed. The FCA have the authority to bring civil and criminal proceedings to those who do not adhere to the new directive which would have a major impact on one’s business and reputation.

Moving forward, the new regulations offer improved safeguards, compliance and structure formats for both client and lender.

Further information and more detailed benefits on the FCA can be found using the following link: – www.fca.org.uk

April 2014 here we come.