29Feb

Eight consumer credit firms were informed on the same day that they had lost their authorisation. On February 25 2016, the Financial Conduct Authority (FCA) issued Final Notices to the following firms:

• Simon Wright
• Parvin Oghabi Sadi
• Jonathan Milnes
• John Sanders
• Jawad Khan
• FJ Autos Limited
• AKV Vehicles Limited
• Alan Whittington

Seven of these firms have lost their authorisation for failing to submit the Consumer Credit Return. This must be submitted by all authorised consumer credit firms, other than those holding interim permission, and must be submitted via the FCA’s electronic system quarterly, six-monthly or annually, depending on the nature of the firm’s business and the size of the firm.

The Return contains eight sections, and firms must complete the sections that are relevant to them. As holders of limited permission, i.e. firms considered to pose a lower risk, it would have been sufficient for each of the seven firms to have only completed section 007, which asks for information on:

• Revenue from credit activities
• Total revenue from all activities
• Number of credit transactions
• Number of credit-related complaints
• What the firm’s main credit related activity was during the reporting period
• Total annual income

The FCA regards any failure to submit a regulatory return as a breach of Principle 11 – “A firm must deal with its regulators in an open and co-operative way, and must disclose to the FCA appropriately anything relating to the firm of which the FCA would reasonably expect notice.” Any firm who fails to submit a regulatory return, and continues to ignore the FCA’s requests to do so, should be in no doubt that the eventual outcome will be the loss of its authorisation.

The reasons why Birmingham-based FJ Autos has lost its permission are less clear. The firm was authorised by the FCA in April 2015 to conduct credit broking activities. Again, the FCA cites a breach on the part of the firm to comply with the Principle 11 obligation to co-operate with regulators; and also says that the firm “has failed to ensure its affairs are conducted in a sound and prudent manner.” The Notice goes on to say that the FCA has “significant concerns” about how it has been conducting its business, and that the firm has failed to respond to requests from the regulator to discuss the matter.

Consumer credit firms must comply with the FCA’s 11 Principles for Business, and with all relevant sections of the rulebook such as:

• The Consumer Credit (CONC) sourcebook
• The Complaints Handling (DISP) sourcebook
• The Client Assets (CASS) sourcebook
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.