Consumer Credit Licence interim fee 'criminal'
Posted on in Cycles News
ActSmart Director Tony Jones brands the new consumer credit fee ‘criminal' and an unnecessary penalty cost upon independent retailers.
All CCL holding businesses should have received a joint letter dated 15th July 2013 from the OFT and the Financial Conduct Authority (FCA).
The letter informed recipients that the FCA will take over consumer credit regulation from the Office of Fair Trading in April 2104, and is requesting businesses to pay up to £350 for interim permission to cover the period from April 2014 to April 2016.(click the image on the right to read the letter)
With over 500 retailers currently offering Ride it away cycle finance to their customers, ActSmart subscribers alone must pay over £100,000 to the FCA despite the fact that these retailers have paid up to £1225 for an ‘indefinite' licence with the promise of no maintenance fees for a minimum of 5 years.
ActSmart Director, Tony Jones commented:
"The ‘Interim Permission' fee being charged by the Office of Fair Trading and the Financial Conduct Authority is a needless penalty on small businesses that have already paid up to £1225 for an ‘indefinite' licence. It is grossly unfair that businesses are being asked to bear the cost of an enforced transfer of their licence from one government body to another, especially as the administration fee is extortionately disproportionate to the actual costs involved. This demonstrates a complete lack of understanding of the pressures currently being placed upon small businesses".
What are your thoughts on the charges? Let us know in the comments section below.
As part of the changes firms will have to register with the FCA from September 2013 or they will not be able to carry on regulated consumer credit activities from 1 April 2014.
The letter sent to licensees warned that they must register for interim permission if they plan to use their consumer credit licence after April 2014. It said: ‘If you do not, you are likely to be operating illegally'.
CCL charges already greatly favour large retailers who pay the same fee as a single outlet independent does, but now, with so many other retail pressures, this interim fee simply adds another cost for small business.
The biggest frustration is possibly that retail finance sales continue to be the most successful area of the UK cycle sector, with sales currently booming.
Whilst most bicycle sector sales volumes are going backwards cycle sales achieved via the Ride it away scheme have climbed by over 1/3 in the last quarter & c.60% in recent months, reflecting the growing need for customers to be able to spread the cost of big purchases.
ACT is campaigning against these extra fees and keep members up to date with any response from Government. However, at this point retailers have no option other than to pay the additional charge in order to ensure continued access to retail finance and with the Ride it away scheme proving to be one of the most powerful influencers over bicycle sales in the current market no business should risk losing access.
To find out more about how to make the most of retail finance in store click here.
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If you aren't yet offering your customers finance via Ride it away, click here to find out more or give us a call on 0845 618 7256 to get started.