Consumer credit Licence

[teabags]

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I have been asked to expand on the explanation on the CCL (Consumer Credit Licence), so here goes!

Just for the record, a Consumer Credit Licence is issued to an individual or company in order to trade in the finance industry. The holder of the CCL may add trading names to their licence.

For example: Fred Bloggs Finance Ltd trading as fredbloggsloans.com. Fred Bloggs Finance Ltd could also add bloggloans.com or even anyfinance.com to his trading names if he so wished.

As long as the Fred Bloggs Finance Ltd trading names are part of Fred Bloggs Ltd then there is no problem. What you can NOT have is two separate companies trading under the same CCL. Fred Bloggs Finance Ltd can NOT let any other organization trade under their CCL, thus:

Fred Bloggs Finance Ltd can NOT let ABC Finance Ltd, or their trading styles, trade under the Fred Bloggs Ltd CCL.

Moving on, affiliates can advertise finance products without a CCL, just like a news paper can carry advertisements. However the advertisement must comply with advertising provisions of the consumer credit act. Dependant on the product offered and the claims that are made, advertisements have to carry certain warnings and/or company details.

Each credit advertisement has to have the name of the CCL holder, and claims “triggers” (super fast) or (poor credit). A typical example must be given along with the name of the CCL holder.

The CCL holder in many cases needs to display their address. However, security statements (home is at risk, etc) or advertisements that do not require any form of security (home or car), do not have to have security warnings.

Triggers “claims” must be truthful – for example, if you are advertising debt management/IVA.

The following is from the OFT web-site. Take a look - it explains everything:
• falsely claiming that 'up to 95 per cent of your debt may be written off' when the maximum would be in the region of 60 – 70 per cent
• falsely implying they can guarantee a favourable outcome by the use of such phrases as 'stop all interest and charges'
• failing to state that set-up and administrative fees will be required and will be taken out of payments before the creditors receive any payment
• failing to display the required warnings with the same prominence as the savings promised
• failing to state that homeowners may be required to re-mortgage their properties after 3 years
• failing to state that entering into an IVA also affects an individual's credit rating for six years.
• advertisements and marketing must be accurate, clear and not misleading. Any reference to 'savings' on repayments must make it equally clear that debt
• rescheduling will usually lead to an increase in the size of the sum to be repaid and potentially affect the consumer's credit record. Advertisements should also state whether a fee is payable for the service
The Consumer Credit (Advertisements) Regulations 2004 control the provision of credit and hire facilities to consumers. The aim of the regulations is to ensure that customers receive a true picture of the nature and cost of the credit terms being offered. The regulations apply to all forms of advertising where credit is available.

The typical APR provides a yardstick for measuring the 'cost' of credit under different types of agreement. Potential borrowers are then able to compare the relative cost of credit from different sources. The typical APR must in all circumstances have greater prominence than any other rate of charge and all other relevant triggers.

In short, when marketing finance:

Without a CCL:

1. You do not collect any credit information on your own forms.
2. All contact details of the broker/lender are on the application form.
3. Typical examples are shown.
4. All advertisements do not claim untruths.

With a CCL:

1. Your contact details should be on your forms.
2. Typical examples are shown.
3. All advertisements do not claim untruths.

Large fines are imposed by the OFT so be warned. If you have any more issues, feel free to Pm me.

[PaulPhillips]

Very interesting and I agree with your comments. However the amount of bad avertising is unbelievable so why doesn't the OFT do something about this. More controls are definitely needed and until action is seen to be taken then the companies abusing this will just carry on doing so. It also appears that there are quite a few out there that trade without a CCL. Again why doesn't the OFT check and act quickly.

[johnd]

I think you'll find that they are busy investigating the television companies' quiz phone in programs- even Blue Peter has been caught out!

I imagine they'll have their hands full there for quite a while.

Despite this, i wouldn't think it is worth running the risk of positioning yourself outside of the guidelines as you run the risk of being caught with your pants down.

[teabags]

The OFT are lazy and want everything on a plate, its the merchants that they will come down heavy on first, then affiliates. Fines last year alone, ran into millions of pounds, they had a little go in November 2006 and warned 17 debt/IVA companies to clean up their act, their adverts and websites were misleading consumers. Compliance sweeps are only undertaken by the OFT when they need to get some money in in fines. Trading without a CCL however is a criminal offence.

[Call centre]

How long does it take to get a CCL?

[The Ferryman]

Going back fifteen years or so to the first one, I have a very vague recollection that it may have taken a couple of weeks, but that was in the olden days, probably takes much longer now they have computers and modern communications.

Once you've got one, it is just renewed every five years or whatever.

Bruce

[Michael_Anthony]

They quote 6 weeks or less when you apply, but usually it's sooner, unless of course they request further information in which case things can get delayed.

What happened to "Mr. CCL" aka teabags by the way - did he drown in a huge teacup?

[lurker]

Quote from yesterday's Observer:
"From April 2008 the OFT will have greater powers to control lenders. "Previously you could have a Consumer Credit License so long as you weren't a total villain. In future you will have to demonstrate competence" according to a C.A.B. source".

So worth doing it sooner rather than later as the process is bound to get longer + more expensive.

[essdeekay]

Getting the licence (as well as the data protection licence) is simple - it's the renewal fees which bug me.

Just how much work is involved in renewing these things other than printing some papers and stuffing them in envelopes???

Rant over.


Si

[Michael_Anthony]

You can put them both on direct debit, which is hardly a major headache.

[essdeekay]

Thanks for that Michael.

It's not the process which bugs me, it's the fact of having to pay so much for a simple piece of paper.

Si

[dunklk]

Apologies if this has been answered elsewhere, but where can I obtain a data protection licence (not a CCL) and for how much?

Scratch that, found it. £35 yearly from http://www.ico.gov.uk/what_we_cover/...ification.aspx, incase anyone is wondering.

[lethal0r]

teabags are these points fact or just your take on the OFT documentation? What I have read on their site about CCL licenses seems open to interpretation in several areas.

Without a CCL:

1. You do not collect any credit information on your own forms.
2. All contact details of the broker/lender are on the application form.

[teabags]

Hi lethal0r

Don't shoot the messenger, but to collect finance application data, you MUST have a CCL (in other words you act as the finance broker). There are many other warnings that you must give as well, the regulations don’t just come under the OFT, they come under Advertising standards, the FSA, FOS as well as more regulations dependant on what your promoting.

I take it that you are advertising Secured/Mortgages, be compliant and you will have no problems.

Teabags

[RailyPhill]

Good post Teabags

I touch on this here