Consumer Credit Law and Financial Services Authorisation

A lack of confidence in the banking sector since the credit crunch combined with high interest rates has resulted in an increase in alternative financial institutions and, in particular, peer-to-peer (P2P) lending is being seen as a credible alternative to mainstream banks.  We have recently undertaken work on behalf of Dave Fishwick to help set up a P2P scheme.  Dave has now released a book and stars in a Channel 4 series regarding the development of his business.

However, finance law isn’t just relevant to financial businesses and our corporate team can advise you on aspects of finance law relevant to your organisation. If, for example, you sell goods or provide services on credit to consumers or if you advise people with debt problems it is likely that you will need a Consumer Credit Licence.  Even if your organisation is not-for-profit and/or charitable you may still need a licence.

Further, if your business carries out a regulated activity you also must be authorised by the Financial Services Authority (FSA).   Regulated activities include:

• accepting deposits
• exchanging electronic funds
• dealing or arranging deals in investments
• dealing in or advising in relation to regulated mortgage products or life insurance products

Carrying out a regulated activity without FSA authorisation is a criminal offence which could lead to a fine or even a prison sentence.  It would also mean that your business contracts would be unenforceable.

Our team can advise you on the requirements relating to consumer credit and financial services which are relevant to your organisation and assist you in completing the initial application to the relevant authority.  We can also provide you with ongoing support to ensure your organisation keeps up to date with regulatory and compliance issues.

We also have solicitors who are familiar with the Shariah who would be able to provide advice on finance law that is tailored to fit in with your religion, beliefs or way of doing business.