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.