FCA Withdraws Consumer Credit Activities

The Final Notice published on the Financial Conduct Authority (FCA) website on January 26 2015 should serve as a warning to firms of the need to co-operate fully with the regulator, and to comply promptly with any requests for information.

This Notice concerns London-based credit broking firm Leadgen (UK) Limited, and the FCA has now withdrawn the firm’s permission to conduct consumer credit activities. According to the Notice, the FCA has made repeated attempts to contact the firm to discuss “serious concerns” about its activities, but has not received a reply.

The FCA believes that a prohibition is justified as Leadgen’s actions constitute a significant breach of FCA Principle 11:

“A firm must deal with its regulators in an open and cooperative way, and must disclose to the appropriate regulator appropriately anything relating to the firm of which that regulator would reasonably expect notice”.

The firm is also considered to have breached the Threshold Condition requiring authorised firms to be ‘fit and proper’.

Leadgen had held interim permission with the FCA since the change of consumer credit regulator on April 1 2014.

Leadgen did not exercise its right of appeal to the First-Tier Tribunal, so appears to have accepted the FCA’s decision, and is consequently now unable to carry out credit activities in the UK.

Firms must ensure that they fully co-operate with the FCA at all times. This includes:

  • Submitting fully completed regulatory returns, such as the Retail Mediation Activities Return (RMAR) or the Consumer Credit Return (CCR), on time, via the FCA’s GABRIEL system
  • Providing accurate data in these returns
  • Notifying the FCA promptly of changes in the firm’s name, trading name, address, telephone number, approved persons etc. Examples include when the firm moves to new business premises, or the existing Compliance Officer or Money Laundering Reporting Officer leaves the firm. This should be done via the Connect system on the FCA website.
  • For credit firms that hold interim permission, ensuring applications for full permission are made within the firm’s allocated three month application period
  • Ensuring FCA approval is obtained before commencing regulated activities, or commencing new activities for firms that are already regulated
  • Notifying the FCA immediately of any significant rule breaches
  • Informing the FCA of any changes in the firm’s circumstances which might affect its ability to meet any of the Threshold Conditions (the basic criteria all authorised firms must meet)
  • Complying promptly with any requests for information from the FCA
  • Completing any online or telephone assessments the FCA wishes to carry out on the firm
  • Being willing to receive the FCA for an inspection visit
  • Paying FCA fees, industry levies and any Financial Ombudsman Service compensation awards promptly

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.