Consumer credit covers everything from credit cards and consumer lending, to retail credit and motor finance, to small business lending and P2P. As consumers, it touches most of us at some point in our lives – so from the FCA’s perspective, consumer credit regulation is key to good ‘customer outcomes’.
And the regulator clearly has concerns regarding the way some firms have been approaching consumer credit. The number of s166 reviews continues to increase. There are common themes where things go wrong. Issues around high-level ‘treating customers fairly’ (TCF) principles, the approach to assessing affordability, and the treatment of customers in arrears are all areas that should be front of mind if you’re in the consumer credit sector.
We help consumer credit firms navigate regulation, and make sure they’re delivering good outcomes for customers
We help firms looking to enter the market, and existing firms looking to vary their permissions.
The FCA splits consumer credit firms into two types – Full Permission and Limited Permission. The type of firm you are depends on the activities you carry out.
The FCA authorisation process is far more than simply filling out forms – you need to meet the ‘Threshold Conditions’ – minimum standards for FCA regulation. You’ll also need to demonstrate that you’ve the necessary systems and controls in place, robust compliance procedures and the right culture to ensure the fair treatment of customers is at the heart of your business.
We’ll work with you to prepare the supporting documentation – including your regulatory business plan. We can give advice on the application of the rules, review your existing documentation, help you design new processes, or manage the authorisation process from start to finish.
We’re often asked for help making sure that firms are continuing to operate in line with the Regulatory Business Plan they submitted to the FCA. We can carry out an independent assessment across all FCA regulatory areas, interviewing staff from the Chief Executive down. We’ll assess whether your processes meet the requirements by reviewing the customer journey from start to finish. We can provide feedback on such areas as your affordability checks, or your arrears handling process.
Your people are your biggest asset. We provide bespoke training to help them understand what’s expected. We’ve helped lots of senior managers prepare for their roles as well as designing and delivering training for operational staff.
Credit lending regulatory intervention
The FCA makes no secret of its desire to raise conduct standards within short-term high-cost (‘payday’) credit lending and debt management firms. But no sector will be immune from their oversight. From coaching staff for interviews to helping you set the right tone in written communications, if the FCA have been in touch, we can help you.
The fair treatment of customers is a central pillar of the regulator’s regime. We can help you tell whether your current practices are up to scratch and implement any cultural changes needed to meet their expectations.