Dealers who hold a Consumer Credit Licence will this month receive notification from the Financial Conduct Authority and the Office of Fair Trading about changes to consumer credit regulation. On 15 July the FCA released further information including a call to action for dealers to register for ‘interim permission’ from September, if they wish to continue activities they are currently licensed for with the Office of Fair Trading after 1 April 2014. This will be followed by a full submission, with dealers being notified at a later date if their application had been successful.
Dealers who are not currently FCA regulated, either directly or as an appointed representative, will have to pass the new FCA’s fitness and propriety requirement and meet their financial resources criteria. Failure to satisfy these will mean that they may not be granted FCA authorisation, even if they have previously held an OFT Consumer Credit License.
The FCA has advised motorcycle dealers that they have until the end of August to check their current OFT Consumer Credit Licence details to ensure they include Category D (provision of debt-adjusting) and Category E (provision of debt-counselling). If these categories are not included they need to be added. A review of motorcycle dealers’ consumer credit licences by Automotive Compliance, who are authorised and regulated by the FCA to act as a consultant for motorcycle dealers, indicates that 75 per cent of dealers do not have the correct categories on their Consumer Credit Licence.
Paul Guy, managing director of Automotive Compliance, said, “Dealers should be checking their CCL’s now to save time before they register with the FCA from September for their interim permissions. In many cases, we have found that the Debit Counselling and Debt Adjusting categories are not present on licences. In some cases, even dealers’ basic categories have not been applied correctly, which may not have been a problem in the past. However, in applying to the new regulator for ‘interim permission’, all categories will be checked and errors could result in suspension of trading until any discrepancies are rectified. We are offering free advice to all motorcycle dealers on our website (www.automotive-compliance.co.uk), or we can be contacted on 01206 546063”.