Top 15 Consumer Credit Authorisation FAQs

FCA Limited Permission Credit Broking allows businesses to engage in credit broking as a secondary activity to their main business, such as car dealerships or retailers. It requires a simpler and less burdensome application process compared to full permission authorisation. 

Businesses that engage in activities such as credit broking, consumer hire, or providing credit under regulated agreements require consumer credit permissions. This includes car dealers, dentists, jewellery shops, musical instruments shops, home furniture stores, solar panel installation firms and double glazing firms, other retailers offering hire purchase, and any other brokers who are introducing customers to lenders in order to help them purchase their products and services. 

If you are unsure whether your business requires consumer credit permissions book a free consultation with us and we can tell you whether you need a consumer credit licence or whether you can rely on an exemption.

To apply for a consumer credit licence, you need to submit an application through the FCA's Connect system. The application must include details about your business, governance arrangements, financial information, policies, and measures to ensure compliance with regulations e.g., a Compliance Monitoring Programme (CMP).

Secondary Credit Broking refers to credit broking activities that are ancillary to a business’s main operations. For example, a car dealer who sells cars (main business) arranging finance for customers (ancillary business) is engaging in secondary credit broking. 

A consumer credit licence application involves providing detailed and comprehensive Regulatory Business Plan (RBP) which includes information about your business model, financial forecasts, governance arrangements, systems and controls, policies, and risk management procedures.

It can be a minefield to navigate for non-financial businesses hence why we at Alumni Compliance can give you peace of mind by handling FCA consumer credit regulations while you focus on your main business. 

Requirements include having a UK-based head office, demonstrating that your business has adequate financial resources, maintaining robust governance and risk management frameworks, and ensuring that key personnel such as the SMF29 are fit and proper. 

The steps include registering with the FCA’s Connect system, preparing and submitting the application with all required documentation and supplementary information, paying the FCA application fee, and responding to any additional information requests from the FCA. 

Businesses engaging in credit broking need to obtain either full or limited permission from the FCA, depending on the scale and nature of their activities. Limited permission is suitable for firms where credit broking is not the primary business activity, for example a car dealer, or a dental practice seeking authorisation for credit broking so that they can offer their dental treatments - such as Invisalign or a tooth implant - to their patients on finance.

Car finance providers typically need limited permission credit broking authorisation from the FCA if finance is offered as a secondary service to their main business of selling vehicles. If a car dealer is also engaging in part exchange where the customer's vehicle still has outstanding finance, then they would also need limited debt adjusting and debt counselling permission.

Limited permission credit broking is designed for businesses where credit broking is ancillary to their main business, involving simpler application and compliance processes compared to full permission which is required for businesses primarily engaged in credit broking. Full permission would be required if a firm is engaging in consumer credit activities such as credit broking as their main business. 

Yes, businesses can apply to vary their permission if their activities change or if certain permissions are no longer required. This involves submitting a Variation of Permission (VoP) application through the FCA’s Connect system and demonstrating that they meet the requirements for the new type of permission. A firm can cancel all of their permissions and no longer be authorised and regulated by the FCA if the business does not need any of their permissions. 

The cost varies depending on the type of permission being sought. For an FCA limited permission licence the FCA authorisation application fee is £500. This fee is non-refundable so if the FCA rejects your application - or you withdraw it voluntarily - then the FCA will not refund you your application fee. This is why seeking expert consumer credit guidance is advisable. Alumni Compliance can complete and submit a high-quality application on your behalf to increase the chances of your firm being authorised by the FCA for consumer credit. 

Additional annual fees apply based on the volume of regulated business, e.g., commissions and kickbacks received from the lender for successful credit broking referrals. This annual regulatory fee is made payable to the FCA. 

Once authorised, firms must pay annual fees to the FCA. Invoices are issued based on the type and volume of regulated activities. Firms need to ensure timely payment to maintain their authorisation status. 

The FCA typically processes applications within 3 to 6 months, depending on the complexity of the application and whether additional information is required. Ensuring a complete and accurate application can help expedite the process. 

Ongoing obligations include annual reporting to the FCA, maintaining adequate capital and governance arrangements, and paying annual fees. Firms must also notify the FCA of any significant changes to their business or any breach of the FCA's Consumer Credit (CONC) Handbook rules.