UNTIL earlier this year, it was fairly easy to set up as a leasing company. All you really needed is a consumer credit licence, and you were free to set up a website advertising leasing deals to not just businesses, but individuals too.
In an effort to clamp down on bad practices in a largely unregulated industry, manufacturers and finance companies did try and stamp out unofficial agents and broker-to-broker practice, but without proper regulation in place, it was a tough task.
FCA regulations
the FCA are so diligent about approving businesses fit to sell consumer finance and lease products, it is estimated that 15% of leasing brokers haven’t even applied
When the Financial Conduct Authority took over from the now defunct Credit Broker Licences, previously governed by the Office of Fair Trading, on April 1st 2014, all businesses in the motor trade selling finance or leasing options to consumers had to apply to the FCA for an interim licence to continue trading.
However, the process of application and acceptance is now much more stringent; in fact, the FCA are so diligent about approving businesses fit to sell consumer finance and lease products, it is estimated that 15% of leasing brokers haven’t even applied.
Graham Treble, director of Vehicle Contracts Ltd, said;
“Just like the insurance trade, which we have had experience in, any leasing company who has been approved for an interim permission licence will need to undergo the approval process to be fully compliant.
“This is not a simple process and it is one that is certainly very time-consuming – not only is the application itself lengthy, our internal processes have to be fully compliant in every area.
