Offering credit

If your business sells goods or services on credit or lends money to consumers, you almost certainly need to be licensed by the OFT.

Providing or arranging consumer credit without a licence is a criminal offence and can result in a fine and/or imprisonment. Also, businesses cannot legally enforce a credit agreement if they are not licensed. If you offer debt counselling or debt adjusting services you also need to be licensed.

Before deciding whether to grant you a consumer credit licence, the OFT assesses whether you are a ‘fit’ person. Once you have a licence, the OFT can revoke it, for example if you are convicted of an offence of violence or dishonesty, or fail to comply with the Consumer Credit Act or other consumer legislation.

Under consumer credit law, you must set out credit and hire agreements in a particular way and make sure they contain certain information. New legislation means that, from April 2007 onwards, unfair credit agreements can be challenged in the courts. There are also rules on how agreements are entered into, and the information that must be provided to consumers.

To find out more about your duties as a credit provider, including guidance on who needs a licence and how to apply for one, see the consumer credit licensing area of the site.

Consumer Credit Act 2006

This Act reforms the Consumer Credit Act 1974 and will change the licensing system operated by the OFT. Guidance and information on the changes is available here.

Money Laundering Regulations 2007

From 15 December 2007, the OFT will supervise those businesses with a Category A consumer credit licence, under the Money Laundering Regulations. We have published guidance to help you comply with your obligations under the regulations.

Download Money Laundering Regulations 2007: core guidance (pdf 160 kb).   

Download Money Laundering Regulations 2007 - Information for estate agents and consumer credit licence holders (pdf 76 kb).

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