Regulated activity (Consumer Credit Licences) - UPDATED JANUARY 2016
Since our last statement in 2011 there has been much change in the compliance regulations. It was extremely difficult for ourselves (and our friends at the NGCAA) to provide unequivocal yes or no answers to the question - does our club need to be regulated? With a vast number of different ways that clubs are constituted and an even larger number of payment variations offered by clubs it was impossible to provide a one-size-fitsall answer. We suspected that members' clubs may be exempt from regulation by virtue of the circular nature of their business - i.e. the members are the club. Despite spending significant sums on legal advice we now believe that without a test case -and no club really wants to be the one involved - there will never be a totally satisfactory answer to this, and even then it may only be for the particular circumstances of the club involved.
Our explorations have borne fruit in other ways though and we now believe that we have found a solution whereby clubs can avoid the need for obtaining their own individual regulation that is to the satisfaction of the FCA.. These schemes are suitable for all clubs, be they proprietary or members run
BECOME AN APPOINTED REPRESENTATIVE
Future Financials now have a Principal's Licence that allows us to make clubs our Appointed Representatives.
Effectively, the club will come under the umbrella of Future Financials's licence and will be given a FCA regulation number. Future Financials will become their Principal and will ensure that the club acts in accordance with the FCA requirements. All paperwork and procedures will be clearly co-ordinated between the two parties. In many ways, the procedures will be exactly the same as most clubs who use a third-party collector are currently using. The club will still be able to make decisions as to which members can be on the scheme.
We are pleased that the considerable cost of seeking legal opinion and the time spent on investigating has proved invaluable and also for the help of the NGCAA. By combining our collective knowledge and experience we have been able to produce some potential solutions for clubs.
INSTALMENT SCHEMES RUN IN-HOUSE
If you are running your own in-house scheme you will still need to be regulated, even if you are using a third-party direct debit facilitator. The only way you can avoid the requirement of legislation is if you offer the instalment facility totally without any form of additional charge, be it a service charge, administration charge, interest charge etc. This applies irrespective of the subscription level at your club so, for example, a club charging £1500pa with no charges would be exempt, while a club charging £500pa with a £10 administration fee would not be.