Consumer credit

The Financial Conduct Authority (FCA) issues consumer credit licences. To apply, you should first prepare certain information, such as a business plan and your employment history. You can then use the FCA's online system to apply.

Criteria for consumer credit licences

The FCA will only license applicants if they are a 'fit person' to be licensed. As well as your own activities, those of your employees, agents or associates - past and present - are considered. Factors considered to establish fitness include:

• your competence to engage in the relevant activities
• any offence or conviction connected to the business or anyone involved in running the business
• any evidence of discrimination on grounds of sex, colour or race
• failure to comply with the Consumer Credit Act 2006 or other consumer protection laws
• any consumer complaints about the business
• business practices that are unfair or improper, or could otherwise damage the interests of consumers
• evidence of irresponsible lending
• insolvency, bankruptcy or disqualification as a director
• adverse information from other regulators, professional bodies, trade bodies, consumer organisations or other traders
• unauthorised use of the FCA name or logo (on letterheads or websites) to suggest that the business is 'approved' by the FCA
• failure to comply with general or specific guidance on fitness to hold a consumer credit licence

The FCA can revoke a licence after it has been issued if it receives evidence that calls into question the fitness of a licensee. It can also impose requirements on licensed businesses if it is dissatisfied with any aspect of the licensed activities.

Holding a consumer credit licence

A licence will be issued in the name of your organisation - if you're a sole trader it will be in your name. However, it must include any trading name under which your business intends to carry on consumer credit activity. It's a criminal offence to carry out any business activity that needs a consumer credit licence under a name that's not licensed.

If your business is made up of several companies, each engaging in a business activity for which a licence is needed, you must obtain licensing for each company.

Once you're licensed you must notify the FCA of any changes to your business. This includes changes to the officers of a company holding the licence, its controlling companies, members of a partnership, or even the business address. You must also notify the FCA of other relevant information such as court orders against the business. You must do this within 21 days of the change taking place.

You'll be listed as a licensee on the Financial Services Register.