OFT to FCA
In January 2012, the announcement was made by Government that regulation of Consumer Credit would move from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) with their objectives being:
- to protect consumers, and
- to deliver a proportionate risk-based approach to the supervision of firms
If your business offers credit whether simple or more complex, or you broke finance for your clients, you are now part of some of the biggest changes seen in this sector for almost 40 years.
The new rules and regulations apply to a broad range of businesses impacting the largest majority that offer consumers some level of credit facility. As you would expect, this will affect banks and finance providers, as well as a large number of retailers. However it will also encompass organisations that offer their customers any instalment or deferred basis payments and those involved in debt management, including counselling, administration or adjustment.
The changes apply to a range of credit activities which the FCA has broken into two main categories - high and low risk. Click here to learn more about the category definitions.
It goes without saying that the businesses that will be greater affected are operating in the following industries:
- Hire purchase
- Credit card issuers
- Payday loan companies
- Pawnbrokers
- Debt management and collection firms
- Providers of debt advice
However, those offering payment deferred or payment instalments, in any service organisation, will also be subject to FCA regulation.