Consumer credit

Who regulates consumer credit?

Before 1 April 2014:

1. •

   consumer credit activities (including entering into consumer credit agreements) were regulated by the Office of Fair Trading (OFT)

2. •

   law firms had the benefit of a group licence for consumer credit work, which was issued by the OFT to the SRA and therefore didn't need an individual licence to enter into consumer credit agreements with clients or engage in ancillary consumer credit activities

On 1 April 2014, the Financial Conduct Authority (FCA) took over regulation of consumer credit work and the SRA’s group consumer credit licence disappeared, meaning law firms lost the benefit of the group licence for all consumer credit activities.

Specified consumer credit activities are regulated under the Financial Services and Markets Act 2000 (FSMA 2000). An SRA-regulated law firm can only carry out regulated consumer credit activities if it is authorised by the FCA to do so, or can benefit from an exclusion that brings the activity outside the scope of regulation, or an exemption.

It is an offence to engage in certain types of credit-related regulated activities by way of business without...