Consumer Credit Licences
The Consumer Credit Act 2006 affects those businesses which carry out particular activities in consumer credit and hire.
Who needs a licence?
You may need a Consumer Credit licence (“Licence”) if you do any of the following:
- sell on credit
- hire or lease out any good for more than three months
- lend money
- issue credit cards
- arrange credit for others
- offer higher purchase schemes
- collect debts
- help people will debt problems
- advise on people’s credit standing
- administer agreements for creditors or assignees
- help people to locate records about their financial standing
Even if one of the activities only forms a very small part of your business then you will still need to get a Licence.
If you very rarely carry out one of the above activities you may not be treated as carrying out an activity and therefore not require a Licence but you are advised to check.
If your business does require a Licence then you are required to have the Licence in place before you advertise or market the type of business you are providing. You must also ensure that your Licence number is produced on any promotional or marketing material.
How much does it cost?
Depending on what type of Licence you require there are different levels of fees and you are advised to check the Office of Fair Trading for the current fee payable. Click here for more information.
How long does the Licence last for?
Since 6th April 2008 standard licences are issued on an indefinite basis. The Office of Fair Trading do have the power to revoke, suspend or vary the Licence or impose requirements at any time.
How many Licences?
If there are several different companies that make up your business each company must have a separate licence.
Can a Licence be transferred?
A Licence cannot be transferred. So for example if you change the structure of your business from a partnership to a company you will need to request a new Licence.
It is important that you also keep the Office of Fair Trading up to date with any changes that may relate to the Licence, for example if a director retires.
Can I trade without a Licence?
If you carry out activities that you require a Licence for and you do not have one then this is a criminal offence. The offence is punishable by imprisonment, a fine or even both. You need to ensure that you have a Licence before you begin carrying out any of the activities.
Can I check if a business has a licence?
You can check to see if a business has a Licence by checking the Consumer Credit Register.
Are there any exemptions?
There are some exemptions to needing a Licence. We can check if your business is exempt.
For more information on any of the above please contact Nicola Porter on 01782 652329 or at nicola.porter@tinsdills.co.uk.
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