Credit agreement T&C with an appointed representative

Thank you for e-mailing the Financial Conduct Authority's Information Access Team. This is an automatic acknowledgement to tell you we have received your email safely. Please do not reply to this email. We wil be in touch in due course.

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This email is not intended to nor should it be taken to create any legal relations or contractual relationships. This email has originated from the Financial Conduct Authority (FCA), or the Payment Systems Regulator (PSR).

The Financial Conduct Authority (FCA) is registered as a limited company in England and Wales No. 1920623. Registered office: 25 The North Colonnade, Canary Wharf, London E14 5HS, United Kingdom

The Payment Systems Regulator (PSR) is registered as a limited company in England and Wales No. 8970864. Registered office: 25 The North Colonnade, Canary Wharf, London E14 5HS, United Kingdom

Switchboard 020 7066 1000

Web Site http://www.fca.org.uk (FCA); http://www.psr.org.uk (PSR)

Dear Victoria,

Thanks for your email to the Financial Conduct Authority’s (FCA) Freedom
of Information team on 30 April 2016. As yours is a general query rather
than a request for information we hold, this is not being treated as a
request under the Freedom of Information Act. As such, it’s been passed to
me in the contact centre to respond to.

Unregulated agreements

I understand that you’re looking to find out what information should be
provided to consumers entering in to an ‘unregulated agreement’ with a
firm that is an [1]appointed representative of an FCA-authorised firm.

If you’re borrowing money under an agreement which is not a [2]regulated
credit agreement or a [3]regulated mortgage contract, this is outside of
our remit. It’s not possible for a firm to be an appointed representative
of an authorised firm in relation to unregulated business, so the firm
wouldn’t have to follow our rules. However, we’d expect them to make it
clear which activities they’re carrying out aren’t regulated by the FCA.

What we do

Our role is to make sure that firms carrying out regulated activities are
following our rules and treating their customers fairly. It’s not our
place to become involved with individual disputes between consumers and
firms, so we wouldn’t be responsible for determining the status of a
contract when the consumer is unclear due to a lack of details in the
agreement. In this case, you may wish to seek independent legal guidance
to help you interpret the legality of the contract. As a first step, you
can [4]speak to Citizens Advice to find out if this is something they can
help you with.

Other regulators

The FCA is the only regulatory body that supervises the conduct of firms
entering into regulated credit agreements as lender. If the lender is a
bank or building society, the prudential aspect of their business will be
overseen by the [5]Prudential Regulation Authority (PRA).

The [6]Financial Ombudsman Service is an organisation that’s in place to
settle disputes between consumers and regulated firms, but they don’t have
powers to reprimand firms for poor behaviour.

I hope this is helpful.

Yours sincerely,

Jennie Hubbard (Miss)

Associate | Customer Contact Centre

Financial Conduct Authority | [7]www.fca.org.uk

Consumer Helpline: 0800 111 6768

Victoria, to help improve our service, I’m interested in finding out about
your experience with the Contact Centre. I’ll send you a link to a short
survey and I’d appreciate it if you could take a few moments to share your
feedback about the service you've received from me.

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Dear Victoria Dixon,

At the FCA we’re always looking at ways to add value to the service
we deliver.

You were recently in touch with a member of our team and I’d like
your feedback. The survey will only take a few minutes to complete.

Please click [1]here to complete the survey. 

Thank you in advance.

Regards,

Jo-Anne Ruggieri

Contact Centre Manager

Financial Conduct Authority

[2]www.fca.org.uk

References

Visible links
1. https://fcaconnect.force.com/consumers/S...
2. http://www.fca.org.uk/

Thank you for e-mailing the Financial Conduct Authority's Information Access Team. This is an automatic acknowledgement to tell you we have received your email safely. Please do not reply to this email. We wil be in touch in due course.

This communication and any attachments contain information which is confidential and may be subject to legal privilege. It is for intended recipients only. If you are not the intended recipient you must not copy, distribute, publish, rely on or otherwise use it without our consent. Some of our communications may contain confidential information which it could be a criminal offence for you to disclose or use without authority. If you have received this email in error please notify [email address] immediately and delete the email from your computer. Further information on the classification and handling of FCA information can be found on the FCA website (http://www.fca.org.uk/site-info/legal/fc...).

The FCA (or, if this email originates from the PSR, the FCA on behalf of the PSR/the PSR) reserves the right to monitor all email communications for compliance with legal, regulatory and professional standards.

This email is not intended to nor should it be taken to create any legal relations or contractual relationships. This email has originated from the Financial Conduct Authority (FCA), or the Payment Systems Regulator (PSR).

The Financial Conduct Authority (FCA) is registered as a limited company in England and Wales No. 1920623. Registered office: 25 The North Colonnade, Canary Wharf, London E14 5HS, United Kingdom

The Payment Systems Regulator (PSR) is registered as a limited company in England and Wales No. 8970864. Registered office: 25 The North Colonnade, Canary Wharf, London E14 5HS, United Kingdom

Switchboard 020 7066 1000

Web Site http://www.fca.org.uk (FCA); http://www.psr.org.uk (PSR)

Dear Victoria

Thank you for contacting our Information Access Team, after their review
your queries have been forwarded onto us for further review as we are the
most appropriate department to answer your questions. As you have asked us
a question and not requested any information that we hold, we will not be
processing your query under the Freedom of Information Act and instead I
will be providing you with a response below.

Where a contract exists between an unregulated lender and individual but
the unregulated lender is an authorised representative of a regulated
firm, should the said contract include information about that business
status ensuring the consumer is aware of their position?

It is unclear about what you mean by this, as firms that are registered
with us an appointed representative will be regulated by us through their
principal.  This means that a firm will either have to be unregulated or
an appointed representative, there is no situation where a firm can be
both in relation to the lending of credit.

A unregulated lender doesn’t have to abide by any of our rules as they
haven’t been authorised by us. An appointed representative must comply
with the Consumer Credit (Agreements) Regulations 2010.  These require,
among other things, a statement of the identity and geographical address
of the creditor and (where relevant) any credit intermediary involved.
They also require a statement specifying that the FCA is the supervisory
authority under the CCA, and a statement explaining that a debtor has (or
in the case of business debtor may have) the right to complain to the
Financial Ombudsman Service (FOS).

At the header of the contract should the word "unregulated agreement" be
used if it is not the case?

If an agreement is unregulated, it will not be subject to any of our
rules. If an agreement is an authorised agreement, firms will have to
abide by the disclosure rules that I have stated above in relation to
Appointed Representatives.

Where a consumer is unsure about their own contract with an unregulated
lender (but is an appointed representative as above) would the FCA be
responsible for determining the status of that contract if the consumer
was left unsure by the lack of details within?

All letter sent by Appointed Representatives will have to abide with
[1]Gen 4.3 (letter disclosure)- with the limited exception in GEN 4.3.7R -
in respect of every letter or electronic equivalent which is sent to a
retail client.  GEN 4.3.3G makes clear that this includes letters etc sent
by any of a firm's employees, including its appointed representatives. 
The prescribed wording is in [2]GEN 4 Annex 1.

The exception in GEN 4.3.7R means that the statutory status disclosure is
not required in the credit agreement (where this is within the scope of
the Consumer Credit Directive) or in a letter or electronic equivalent
accompanying such an agreement.

However, it is still required in all other letters etc which the appointed
representative sends to a customer. The Agreements Regulations stipulate
the headings required in a regulated credit agreement.  They do not
stipulate the inclusion of information about the complaints procedure of
the firm (apart from the reference to FOS), but this is required
separately under our [3]DISP rules.

We don’t have the powers to look into individual matters and so we
wouldn’t be able to clarify the status of a contract. We would expect for
a firm to abide with the rules that I have stated above if they fall under
our remit.

Where a secured agreement is unregulated by the FCA, would the consumer
have an alternative avenue to turn down to obtain protection from
unauthorised firms carrying out activities thought to be unfair?  Other
than the FOS?

If an agreement is unregulated, there are no protections in place for
consumers in relation to these products. The only next step available to
you will be to seek your own legal advice about any disputes that you may
have in relation to an unregulated agreement.

Regulatory Bodies

There are only two bodies which play a role in the regulation of lenders.

FCA – We look over the general conduct of the firms that we regulate

.

FOS- They look into complaints that consumers may have with the firms that
we regulate.

Further Information

As you have asked for a lot of information about lending, I appreciate
that this may be a quite difficult to take on all the answers that I have
provided you. If you would like further guidance, you can call our
consumer helpline on 0800 111 6768 or you can respond with your contact
number and I will be happy to get in touch with you.

Finally, Victoria, to help us improve our service, I’m interested in
finding out about your experience with the Contact Centre today. I’ll send
you a link to a survey and I’d appreciate it if you could take a few
moments to share your feedback with us.

Yours Sincerely

Customer Contact Centre

Financial Conduct Authority

Consumer Helpline: 0800 111 6768

www.fca.org.uk

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References

Visible links
1. http://www.handbook.fca.org.uk/handbook/...
2. https://www.handbook.fca.org.uk/handbook...
3. https://www.handbook.fca.org.uk/handbook...

Telephone:    020 7066 8080 
Email:          [FCA request email]
 
Our ref:        QUE0420 and QUE0410
 
Dear Ms Dixon
 
Thank you for your email.
 
In line with our policy and guidance produced by the Ministry of Justice,
your requests for information was not dealt with under the formal FoIA
regime. This is because your requests were not for 'recorded information';
instead, you had asked us to provide answers or explanations to the
questions you posed. We therefore treated your requests as "routine
correspondence" and passed to our Consumer Contact Centre to respond.
Please note that as we have not processed them under FoIA, we are unable
to complete an internal review of your request.
 
Since your email below we understand that our Contact Centre sent you a
further response dated 13 May, which we hope further answers your
questions. You raise some further questions in your latest email which our
Consumer Contact Centre have provided the following answers:
 
Q: Can you provide to me the agreement and terms that a lender acting as
an appointed representative introducer for a regulated company would enter
into with either the FCA or their principle allowing that position to be
held?
 
A: We can’t provide you with any copies of agreements that AR’s may have
with their principle as this would be a private agreement between
themselves. Principles would have to fill in a form and submit it to us
when they take on an Appointed Representative. You can find the form via
this link -
[1]http://www.fca.org.uk/your-fca/documents...
 
Q: Also, with regards to lending. What is the actual law for anybody to
lend funds to another person if the lender has no licence or authorisation
to continue doing such from a relevant authorisation?
 
A: As we aren’t legally trained, we are unable to provide you with any
guidance as to what laws may apply in this situation. I will state that if
a firm/individual is providing services or products which should be
regulated without our authorisation, this could be a violation of the
Regulated Activities Order. [2]Section 60B of this order defines what a
regulated credit agreement is.
 
Q: With regards to Loan Sharks, how is this term defined within the FCA?
 
A: We don’t recognise this term and so we have no definition of a ‘loan
shark’.
 
Q: I simply would like to know what is needed to become a lender or can
anybody do it regardless of authority?
 
If you would like information on the authorisation process for a lender,
we have a dedicated webpage explaining the steps that firm can take when
they require authorisation. You can find this page via the following link
–
[3]https://www.the-fca.org.uk/authorisation...
 
If you are still unhappy with the responses you have received please let
us know and we can look into this again for you.
 
Yours sincerely,
 
Information Access Team / Finance and Business Services
Financial Conduct Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS
 
Tel:    +44 (0)20 7066 8080
[4]www.fca.org.uk
 
 
 
 
 

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