In its first Data Bulletin of 2016, the Financial Conduct Authority (FCA) has provided an update on the process of authorising the many consumer credit firms in the UK. All figures in the bulletin are correct as of September 30 2015.

At this time, there were 39,926 firms in the UK – excluding appointed representatives – who were legally able to carry out some form of credit activity. 21,438 of these have been fully authorised by the FCA and a further 18,488 still hold interim permission, and hence are either yet to apply for full authorisation, or else are waiting for an FCA decision on their application. The FCA is also considering 1,359 applications from new credit firms.

For most interim permission firms, the application period has closed. Some 15,372 firms have lapsed or cancelled their authorisation, which could be for a variety of reasons, including:

• The firm decides it does not require credit authorisation
• The firm will be, or has been, consolidated into another firm within the same business group
• The firm has ceased trading

1,187 firms withdrew their application for authorisation, and at the time of writing, only 28 firms had seen their applications refused.

Firms who have seen their applications refused include:

• Money Clinic Debt Management Limited, who previously carried out debt counselling, debt adjusting and credit broking activities under interim permission. Concerns were identified regarding the level of fees it charged, the quality of its debt advice and its ability to meet the prudential resources requirement
• Big T Media Limited (trading as New Start Debt Solutions), another debt management firm. The firm’s advisers were not considering all debt solutions that may be suitable for a particular customer, and customers were being placed into repayment plans regardless of their circumstances. The FCA also had serious concerns over the competence and lack of relevant experience of the firm’s sole director; the firm’s fee structure was confusing; and the procedures the firm provided in its application for areas such as compliance monitoring, staff training and assessment of suitability of advice did not provide the level of detail the FCA expects to see

Processing times for authorisation applications continue to increase. In the third quarter of 2015, the FCA took on average 25.6 weeks to reach a decision on a full permission application, 11.2 weeks on a limited permission application and 11.7 weeks on a variation of permission application.

The bulletin also contains data on the FCA’s ongoing reviews of authorised firms’ financial promotions. Although the regulator only identified 34 promotions that needed to be amended or withdrawn, from the 1,108 it reviewed during the third quarter, 22 (65%) of these 34 were in the consumer credit sector. Credit firms are thus advised to re-read the Financial Promotions rules in the FCA Handbook, and make any required changes to their promotional material.

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.