CCLs: The lowdown

How familiar is your business with Consumer Credit Licenses (CCLs)?

If you are offering credit to your customers via point of sale (POS) finance, then they are something you need to think about. CCLs are issued by the Financial Conduct Authority (FCA) and are a crucial element in your overall business compliance. They also help to highlight your proactive and customer-centric approach.

What are CCLs?

CCLs enable the FCA to keep track of organisations offering consumer credit, and ensure that only firms with a ‘suitable business model’, ‘run by ‘fit and proper’ people’ are licensed to offer credit. In turn, this helps to keep the overall credit market well run, protecting customers from unscrupulous lenders and improving transparency.

Organisations holding CCLs are required to follow various rules, including those in the FCA Handbook, rules about terms in sales contracts, the Consumer Credit Act (CCA) and the Consumer Protection from Unfair Trading Regulations.

Do I need a CCL?

If you are only offering finance for periods of 12 months and below, and if you are offering exclusively 0% finance (i.e. you are not charging interest) then you do not require a CCL. This means that you can still offer your customers the flexibility benefits of a range of different 0% finance solutions without going through the licensing procedure.

If, however, you are offering finance for periods of over a year, or if you are offering rates of above 0%, then you are liable, and you will need to apply.

How do I apply for a CCL?

Duologi will support you through the process of application if you become liable through finance solutions we provide.

In order to apply, you need to supply some core business information:

1.  Any relevant business documents such as draft agreements, pre-contract information and promotional literature, so the FCA can understand precisely what you are offering. Duologi is able to supply much of this.

2.  Calculations in relation to project consumer credit income over the next 12 months.

3.  Detail on the regulated financial activities you will carry out.

4.  Employment histories and addresses for each approved person – as well as an understanding of who will be your approved persons and how you will manage risk in relation to money laundering.

5.  Details of partners, shares, subordinated loans or other external funding.

6.  A detailed business plan, including your existing customers and longer-term strategy (there is some guidance on what to include here).

There is also an IT self-assessment questionnaire to carry out via the above link, and sole traders or approved persons will need to supply their National Insurance or passport number.

What happens once I have my license?

As outlined above, there are certain rules and regulations that your organisation will be expected to follow. Because Duologi can manage every aspect of your POS finance solution for you, you can get on with running your business as normal. You just need to notify the FCA of any changes to your business, such as changes to your office, your controlling companies, members of your partnership, if relevant, and information such as court orders against your business

Want to learn more about CCLs and your business? Get in touch today.