You may or may not know that consumer credit licences are soon going to change – in fact, from the end of March 2014, all existing consumer credit licences will no longer apply.
That is because firms are currently regulated by the Office of Fair Trading, but will from April be regulated by the Financial Conduct Authority, one of the new organisations that replaced the former FSA.
Under the FCA, regulation is expected to include much closer scrutiny, and tighter enforcement of standards – not to mention an increase in the licence fee.
Because of this, we are seeing some former consumer credit licence holders withdraw from undertaking relevant activities.
Consumer credit licences are needed by lots of different companies, including those who offer long-term leasing of goods, hire purchase arrangements, or even simply introduce clients to someone who will lend them money.
A licence is also required in order to collect debts due on consumer credit or hire agreements, even if the debt collector is not the creditor.
This means that, if you undertake activities that require you to hold a consumer credit licence (or, from April 2014, to be regulated by the FCA), any debt recovery firm you engage must also be regulated.
At CPA we are working to ensure we have everything in place for the transition, but we expect to see clients of some other companies left in the lurch as their former collections agents may not be willing to pay the increased fees, or subject themselves to the increased level of scrutiny.
If your collections firm has not made the transition to FCA regulation, meaning they can no longer act on your behalf, contact the CPA to see if we can recover your debts for you.
Once again, this is an issue that is only likely to affect other consumer credit licence holders – so if you are involved in leasing, hire purchase, arranging credit, or any other similar licensed activity, speak to your collections agent to ensure you are not left unable to recover debts from April onwards.