If your business sells goods or services on credit, lends money or provides debt counselling or debt adjusting services to consumers, you must certainly need to be licensed by the Office of Fair Trading (OFT).
Providing or arranging consumser credit without a licence is a criminal offence and can result in a fine and/or imprisonment. Businesses cannot legally enforce a credit agreement if they are not licenced.
Before deciding to grant a consumer credit licence, the OFT assesses whether Applicants are a 'fit person' Once a licence has been granted, the OFT can revoke it, for example if individuals involved with the business are convicted of an offence of violence or dishonesty, or fail to comply with the Consumer Credit Acts 1974 and 2006.
Under the legislation, set out under the Consumer Credit Acts 1974 and 2006 and the subordinate legislation, businesses must set out credit and hire agreements in a particular manner and make sure they contain specified information.
For more detailed guidance go to Consumer Credit Regulation
For more information please go to the website of the Office of Fair Trading at www.oft.gov.uk
Copies of the legislation mentioned on this page can be purchased from Her Majesty's Stationery Office or can be accessed at www.opsi.gov.uk
Please note: This information has no legal force and is not an authoritative interpretation of the law, which is a matter for the Courts. It is intended to help those in business to understand in general terms, the main features of the legislation. The information is not a substitute for the legislation and you should refer to the text of the legislation for a full statement of legal requirements and obligations. Where appropriate, you should seek your own independent legal advice.
For further information, please contact the City of Newcastle upon Tyne's Trading Standards Service on 2116121 or via E-mail at tradingstandards@newcastle.gov.uk.
Last Reviewed/Updated: May 2011.