On 2nd January the FCA introduced new rules which ban credit brokers from charging fees to customers and from requesting customers’ payment details for that purpose. Only brokers that comply with new requirements providing clear information to the customer up front regarding who they are dealing with, what fee will be payable, and when and how the fee will be payable will be able to charge an upfront fee.
The FCA was concerned that customers were being misled, paying fees unknowingly and passing on bank details to third parties without consent. Over 40% of consumer credit complaints received by the FCA relate to credit brokers, 80% of which relate to firms charging upfront fees.
The new rules are summarised on the FCA website and can be found by clicking here. The FCA have launched a consultation on whether to retain the existing rules as well as introduce new rules for credit brokers which can be found by clicking here. Responses are to be submitted by 6th May 2015.