Rules for credit brokers further tightened

The Financial Conduct Authority (FCA) has announced new rules for credit brokers, which will come into play on 2nd Janurary 2015 – the same day the FCA's new payday loan caps are officially introduced.

The notification, posted on the FCA website, began: "We have significant concerns about the practices of some credit brokers who charge upfront fees to consumers. Some 41 per cent of all the complaints received since 1 April by the FCA’s Consumer Credit Department relate to credit broking, and around 80 per cent of these are about online brokers charging upfront fees."

How the new rules will affect the consumer credit industry

Credit brokers that do not abide by the FCA's new requirements will be prohibited from requesting customers' payment details and from charging them any fees altogether.

The FCA explained: "Credit brokers must make sure 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. All brokers will need to include their legal name (as it appears in the FCA Register) in all advertising and all correspondence with customers."

Credit brokers will also no longer be able to market themselves as 'lenders'. The FCA has explicitly stated that all credit brokers must make it abundantly clear that they are 'credit brokers' in advertisements for services.

Another of the new rules states that all fee-charging credit brokers must notify the FCA, on a quarterly basis, of all the websites they operate.

Since the FCA became the consumer credit regulator in April, it has increased its control over the market in order to make it much safer for consumers. These new rules will further that, and ensure that credit brokers do not take advantage of those who cannot afford to pay loans back.

Hiring responsible credit control staff is essential

It is the responsibility of credit control departments to ascertain whether or not a potential customer has the appropriate financial means to do business. For this reason, it is hugely important that responsible and experienced individuals are hired to work as credit analysts and credit controllers.

Portfolio Credit Control has extensive experience in recruitment for roles in the financial sector, and can help you identify the most suitable candidates for your vacancies.

For more information on how our expert consultants can enhance your recruitment process, call us today on 020 7650 3199, or email us at recruitment@portfoliocreditcontrol.com.