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Adviser fury over additional consumer credit fees

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Advisers have slammed the FCA’s new interim consumer credit licence charges which do not recognise fees already paid to the Office for Fair Trading for indefinite licences. 

The FCA will take over consumer credit regulation from the OFT in April 2014 as part of a crackdown on payday lenders.

This month, the FCA wrote to firms with a consumer credit licence asking sole traders to pay £150 and most other firms to pay £350 for interim permissions as part of the new FCA-regulated market.

Since 2008, most applications for consumer credit licences have been granted on an indefinite basis with firms expected to make a one-off payment to be granted a CCL, alongside five-yearly maintenance charges. 

The cost for these licences increased on 1 April from £575 to £670 for sole traders and from £1,215 to £1,466 for partnerships or companies. The maintenance charge costs £208 for sole traders and £505 for other firms.

Money Marketing understands the FCA will not exempt firms that already hold an indefinite licence. However, the OFT says it will consider what to do about fees already paid and announce its position  within the next month.

The FCA will publish a consultation for more detailed proposals on the new regime in September and a further consultation on fees in October.

Kingston IFA partner Sam Caunt says: “In this case the regulator is acting without integrity, decency, fairness or understanding. If we treated customers like this we would rightly get harangued.”

PMI Independent Advisers director John Stewart says: “I do not think the regulator understands that advisers are already paying increasing costs and the amount of difficulties they are facing.”

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  1. I have had a reply from FCA and in some respects it is a holding reply given that more detailed proposals as to how the FCA will mange consumer credit regulation are due in September. However the FCA point out that this is a Government decision to transfer responsibility to the FCA and the FCA gets no additional funding. Therefore the costs of that additional responsibility has to be paid by us.
    So, basically, tough. Sympathy, understanding, commitment to keeps costs under control but do not blame us. The government is to blame which is logical. The issue is as always who should pay – firms or the tax payer through general taxation? In my view the tax payer as the OFT gave the commitment and the Government should support it – and I have just seen a pink elephant fly by the window!

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