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What rights do the Financial Conduct Authority (FCA) now have to intervene in consumer credit related insolvencies?
Policy Statement: PS14/3—Final rules for consumer credit firms, LNB News 28/02/2014 65
Detailed rules for consumer credit firms have been issued by the FCA, which takes over the regulation of around 50,000 consumer credit firms from the Office of Fair Trading (OFT) on 1 April 2014. The final rules carry across many standards from the Consumer Credit Act 1974 (CCA 1974) and the OFT guidance, and contain higher standards for payday and other high-cost short-term lenders and for debt management firms.
When are the powers effective?
On 1 April 2014, the FCA took over the regulation of around 50,000 consumer credit firms from the OFT. This means all firms that carry on regulated consumer credit activities are brought into the FCA's regulatory regime, including their authorisation, supervision and enforcement processes.
Any companies/partnerships wanting to continue carrying on consumer credit activity covered by their OFT licence after 1 April 2014 must have obtained an interim permission from the FCA.
Which firms are affected?
Firms (including individuals) carrying on regulated financial services activities in the UK must be authorised by the FCA unless they qualify for an exemption or an exclusion.
An authorised firm will be granted either full or limited permission depending on the activity it undertakes.
Examples of limited permission consumer credit activities include:
• consumer credit lending (where the main business is selling goods or non-financial services and there is no interest or charges)—this excludes hire-purchase and conditional sale
• consumer hire
• credit broking (where the main business is selling goods or non-financial services and broking is a secondary activity)
• credit broking in relation to the Green Deal
• not-for-profit debt counselling and debt adjusting
• not-for-profit credit information services
• local authorities (lending within the scope of the Consumer Credit Directive 2008/48/EC)
Examples of higher-risk consumer credit activities incl
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