Changes to consumer credit on the horizon

Changes to the regulation of consumer credit are just around the corner with news that the responsibility for consumer credit regulation is to be moved from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) on 1 April 2014.

Businesses which carry out regulated activity can expect some fairly significant changes in the form of tighter supervision by the regulator, a more thorough authorisation process, increased reporting requirements and higher individual liability for employers in the consumer credit business.

Businesses are being warned to familiarise themselves with the incoming changes, to review their current compliance systems and rectify any perceived shortfalls.

In order to gain authorisation to trade, business owners will be under pressure to meet the requirements set by the new regime and to prove that theirs is a competent and well run business.

It is expected that the proposed changes will be more costly and will therefore have the most impact on smaller businesses. However, the FCA has suggested that it will be mindful of this issue and that help will be offered in the form of allowing small businesses the opportunity to represent authorised companies, rather than having to go through the process of being authorised themselves.

It is imperative that business owners understand what the new regime involves and the implications it has for them. At Palmers, we can advise small or larger businesses on the appropriate measures involved in moving from regulation by the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA).

For more information and guidance on any regulatory issues and how they might impact your business, please visit our website or contact BJ Chong.