Consumer Credit
FCA Authorisation
Specialist regulatory support for consumer credit lenders, credit brokers, debt advisers, debt collectors, and P2P lending platforms serving UK consumers.
Consumer Credit Regulatory Landscape
The consumer credit sector encompasses lending activities, credit broking, debt advice, debt collection, and peer-to-peer lending platforms. The FCA assumed regulation of consumer credit from the OFT in 2014, bringing significantly enhanced consumer protection standards.
FCA regulation has transformed the sector through the Consumer Credit sourcebook (CONC), introducing stringent affordability assessments, creditworthiness checks, and responsible lending obligations. The Consumer Duty further elevates expectations for fair value and customer outcomes.
Successfully navigating authorisation requires demonstrating robust affordability frameworks, comprehensive debt management procedures, and customer-centric business models that prioritize borrower welfare and financial resilience.
Typical Services
- Unsecured personal lending
- Credit broking and intermediary services
- Debt counselling and debt advice
- Debt collection and debt administration
- Peer-to-peer lending platforms
- Buy-now-pay-later (BNPL) services
How We Support Consumer Credit Firms
- Business model scoping and permissions mapping
- Affordability framework design and implementation
- Lending policy and credit risk framework development
- Technology and platform selection guidance
- Capital planning and financial projections
- Senior Manager identification and recruitment
- Complete Connect application submission
- Creditworthiness and affordability procedures
- CONC compliance manual and policies
- Vulnerable customer framework documentation
- Financial promotions and marketing compliance
- Complaints handling and dispute resolution
- FCA query management and responses
- Senior Manager interview preparation
- Additional information and clarification requests
- Conditional approval requirements fulfillment
- Post-authorisation compliance monitoring
- Ongoing regulatory support and updates
Required FCA Permissions
Consumer credit firms require specific permissions based on their lending or intermediary activities.
Lending
Providing credit to consumers through loans, credit cards, overdrafts, or other credit facilities.
- Affordability assessments
- Creditworthiness checks
- Responsible lending policies
- APR calculations
Credit Broking
Introducing consumers to lenders or arranging credit agreements on behalf of customers.
- Lender panel due diligence
- Customer best interests
- Commission disclosure
- Clear explanations
Debt Adjusting
Negotiating or varying the terms of a consumer credit agreement on behalf of the customer.
- Debt solution suitability
- Fee transparency
- Client communication
- Creditor negotiation
Debt Counselling
Providing advice to customers about the liquidation of debts or debt management solutions.
- Qualified advisers
- Free debt advice
- Vulnerability support
- DMP administration
Debt Collection
Recovering debts due under credit agreements, including in-house and third-party collections.
- Fair treatment standards
- Forbearance procedures
- Complaint handling
- Vulnerable customer policies
Operating an Electronic Platform for P2P Lending
Operating a platform that facilitates lending between individual lenders and borrowers.
- Platform resilience
- Wind-down planning
- Investor appropriateness
- Loan book management
Permissions & scope
Which regulated activities the firm will carry on, and the exact permissions that follow from them. Everything downstream is scoped to this, so a permission asked for loosely is a business plan and a set of controls built against the wrong thing.
Business model
What the firm does, who for, and how it earns. The FCA tests whether the model is viable and whether the permissions being requested actually match it, rather than reading the two documents separately.
Governance & SM&CR
Who is accountable for what, and whether they are fit and proper for it. Senior manager responsibilities have to be mapped to named people and evidenced, not asserted in a paragraph.
Policies & controls
The procedures that make the model work in practice, and evidence they are followed rather than filed. A policy the firm cannot show operating is the most common gap at the gateway.
Financial resources
Capital, projections and an orderly wind-down. The figures have to agree with the business model rather than sit beside it, and the wind-down plan has to be costed.
Key Regulatory Requirements
Consumer credit firms must demonstrate compliance with CONC and Consumer Duty frameworks.
CONC (Consumer Credit Sourcebook) Compliance
- High standards of consumer protection in all activities
- Clear, fair, and not misleading financial promotions
- Adequate explanations of credit terms and conditions
- Pre-contract information and disclosure requirements
- Responsible lending and borrowing principles
- Post-contract information and arrears management
- Fair treatment of customers in financial difficulty
Creditworthiness and Affordability
- Comprehensive affordability assessments before lending
- Verification of customer income and expenditure
- Credit reference agency checks and credit scoring
- Assessment of ability to repay without financial difficulty
- Consideration of committed expenditure and essentials
- Documentation and record-keeping of assessments
- Continuous monitoring and periodic reviews
Consumer Duty Requirements
- Good outcomes for retail customers throughout relationship
- Products and services designed to meet customer needs
- Fair value assessment including price and quality
- Customer understanding through clear communications
- Customer support appropriate to needs and characteristics
- Avoiding foreseeable harm to customers
- Enabling customers to pursue their financial objectives
Vulnerable Customers
- Identification of vulnerable customer characteristics
- Staff training on vulnerability and mental health
- Flexible and sympathetic forbearance policies
- Referrals to debt advice agencies where appropriate
- Appropriate communication methods and language
- Suspension of collections activity when needed
- Extra support for customers with disabilities
Financial Promotions and Marketing
- Clear, fair, and not misleading advertising
- Prominent APR and representative example disclosure
- Risk warnings for high-cost credit products
- Responsible marketing not targeting vulnerable groups
- Social media and influencer marketing compliance
- Affiliate and introducer relationship oversight
- Financial promotions approval processes
Financial Resources and Capital
- Base capital requirement: £5,000 (limited permission)
- Base capital requirement: £20,000 (lending)
- Base capital requirement: £50,000 (P2P platforms)
- Professional Indemnity Insurance as appropriate
- Own funds calculations and ongoing monitoring
- Financial projections demonstrating viability
- Wind-down planning for P2P platforms
Common Authorisation Challenges
Issues we frequently help consumer credit firms navigate during the FCA application process.
Affordability Framework
Building comprehensive affordability assessment processes that satisfy FCA expectations. We provide detailed frameworks covering income verification, expenditure analysis, and decision-making criteria.
Creditworthiness Assessment
Demonstrating robust creditworthiness checks beyond basic credit scoring. We help implement multi-faceted assessment methodologies incorporating credit data, income verification, and behavioral analytics.
Vulnerable Customer Policies
Creating effective vulnerable customer identification and support frameworks. We develop comprehensive policies covering mental health, financial difficulty, and disability accommodations.
Debt Collection Practices
Establishing fair and compliant debt collection procedures. We implement forbearance frameworks, communication standards, and complaint handling processes aligned with CONC requirements.
P2P Platform Resilience
For P2P platforms, demonstrating operational resilience and wind-down planning. We create comprehensive contingency plans, investor protection mechanisms, and loan book management strategies.
Consumer Duty Implementation
Embedding Consumer Duty principles across all customer touchpoints. We help design products for target markets, assess fair value, and implement outcome monitoring frameworks.
Frequently Asked Questions
How do consumer credit firms build an affordability framework?
Building comprehensive affordability assessment processes that satisfy FCA expectations. We provide detailed frameworks covering income verification, expenditure analysis, and decision-making criteria.
What creditworthiness assessments do lenders need beyond credit scoring?
Demonstrating robust creditworthiness checks beyond basic credit scoring. We help implement multi-faceted assessment methodologies incorporating credit data, income verification, and behavioral analytics.
How should consumer credit firms handle vulnerable customers?
Creating effective vulnerable customer identification and support frameworks. We develop comprehensive policies covering mental health, financial difficulty, and disability accommodations.
What are compliant debt collection practices under FCA rules?
Establishing fair and compliant debt collection procedures. We implement forbearance frameworks, communication standards, and complaint handling processes aligned with CONC requirements.
How do P2P platforms demonstrate operational resilience?
For P2P platforms, demonstrating operational resilience and wind-down planning. We create comprehensive contingency plans, investor protection mechanisms, and loan book management strategies.
How do consumer credit firms implement Consumer Duty?
Embedding Consumer Duty principles across all customer touchpoints. We help design products for target markets, assess fair value, and implement outcome monitoring frameworks.
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Learn more →Ready to Get Authorised?
Speak with our consumer credit regulatory specialists to discuss your FCA authorisation.
Phone: 0330 133 0811
Email: contact@memaconsultants.com