FCA Issue New Rules for Credit Brokers

The FCA has published a new policy statement on credit broking, highlighting tougher rules.

The changes arrive following the FCA’s “significant concerns” over credit brokers who charge upfront fees to consumers, with 41% of FCA complaints received in relation to credit broking – 80% of these complaints are about online brokers charging upfront fees.

The changes arrive following the FCA’s “significant concerns” over credit brokers who charge upfront fees to consumers, with 41% of FCA complaints received in relation to credit broking – 80% of these complaints are about online brokers charging upfront fees.

The new rules on credit broking will take effect from 2nd January, 2015, and include:

  • A ban on credit brokers charging fees to customers, and from requesting customers’ payment details for that purpose unless they meet FCA requirements.
  • Credit brokers must ensure customers are given clear information about who they are dealing with, what fee will be payable, and when and how the fee will be payable.
  • Fee-charging brokers must notify the FCA of the websites they operate.
  • Brokers must include their legal name (as it appears in the FCA Register) in all advertising and all correspondence with customers.
  • Advertising must clearly state that the firm is a credit broker and not a lender.

 

Read the  FCA’s new policy statement here.