Posted on: 07 February 2014
On 1st April 2014 the Financial Conduct Authority (FCA) will assume responsibility for Consumer Credit from the Office of Fair Trading (OFT).
The new FCA regulation will apply to any firm or individual offering credit cards and personal loans, selling goods or services on credit, offering goods for hire, or providing debt counselling or debt adjusting services to consumers. The area in which the FCA's regulation will be seen as the most intrusive will probably be conduct of business.
The FCA are seeking to ensure that the quality of firms and individuals who are granted Consumer Credit licences is substantially enhanced, which should prove a great boost for consumers. Life will be much tougher under the FCA than the OFT, which had limited resources and powers.
The policy statement and final rules are due to be published by FCA in February but the consultation paper (CP13/10) provides some practical detail about the areas the FCA sees as the main risks for consumers and how it intends to deal with them. A new rulebook, the Consumer Credit Sourcebook, will contain the new rules and guidance. The FCA will carry across the existing OFT standards, turn them into FCA rules and guidance and will then be able to use for enforcement.
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