Financial regulator the Financial Conduct Authority (FCA) issues warnings almost daily on its website regarding firms who it believes are conducting financial services activities without its authorisation. The first such warning about a consumer credit firm was posted on April 4 2014, only days after the FCA took over as regulator of consumer credit.
In the warning, the FCA said that a firm called Wage Lender was conducting consumer credit activities in the UK without its permission. According to the company site at www.wagelender.com, the firm offers payday loans of up to £750. There are no claims on the site about the firm being authorised by any regulator – regulated firms usually have a statement on their websites confirming that they are ‘authorised and regulated by the Financial Conduct Authority’. The site also gives no indication of where the firm is based, and gives no contact details.
Customers are advised to check the Financial Services Register and the Consumer Credit Interim Permission Register to ensure that firms they deal with are authorised, and to report any unauthorised firms to the FCA. Customers who do business with unauthorised firms will not be able to make a complaint about that firm to the Financial Ombudsman Service, or make a claim to the Financial Services Compensation Scheme if the firm becomes insolvent.
As part of its enforcement activities, the FCA seeks to prevent firms carrying out regulated activities without its authorisation. Doing so is a criminal offence.
The FCA took over as regulator of consumer credit on April 1 2014. Firms who held a Consumer Credit Licence (CCL) from former credit regulator the Office of Fair Trading prior to this time were able to apply for interim permission from the FCA. However, the period for applying for interim permission has now ended, and any firm seeking credit authorisation now needs to follow the full FCA application process.
The FCA has written to all former CCL holders who did not apply for interim permission, to enquire as to what their plans are. Any firm or individual who receives such a letter is advised to reply promptly – if they are no longer conducting credit business, they should tell the FCA of this. The FCA will shortly publish a list of former CCL holders who did not apply for interim permission and did not inform them of their intention to cease credit activities, and the implication will be that anyone who appears on this list may also be conducting unauthorised activity.