News Article

Debt Collection

CSA reports members’ success in seeking FCA authorisation – over 50% now fully authorised

By CreditMan Tuesday, April 26, 2016

Over half of all debt collection agencies and members of the Credit Services Association (CSA) who have applied to the Financial Conduct Authority (FCA) for full authorisation have had their applications accepted, and the pace of authorisations appears to be accelerating.

According to statistics released as part of the CSA’s Data Gathering Initiative (DGI), 76 (52%) of the 145 members that submitted regulatory business plans to the FCA now have full authorisation, with the balance (69 companies representing 48% of the total) still at the Interim Permission stage.

John Ricketts, Vice President of the CSA who compiled the data, said that the figures compare favourably with other parts of the wider credit industry, and notably debt management companies (DMCs) who are yet to see many across the line: “The success of members to date reflects the preparedness and professionalism of those in the sector,” he explained.

“We know from other DGI research that agencies have been investing significantly in compliance and in preparing for the obligations placed upon them by a new regulator, and it appears that this investment is paying off.”

The statistics reveal a number of interesting anomalies: out of the CSA's 271 full, foundation and affiliate members (not counting originator creditor and international membership) , 76% (207) originally registered for Interim Permission with the FCA in April 2014 and 64 (24%) did not. However, of those 207 that did, 11 (5%) subsequently cancelled their Interim Permission and a further 51 (25%) allowed their Interim Permission to lapse. The remaining 145 continue to be regulated by the FCA and submitted regulatory business plans for approval to full authorisation.

John believes that there could be many reasons why only 145 out of the 271 actually progressed to apply for full FCA authorisation: “Given the diversity within our membership, some will have found that FCA authorisation was not required because of their particular business model, perhaps because they are not collecting financial services debt or are only engaged in commercial debt collection,” he continued.

“Others will not have qualified for authorisation since they are acting as an appointed representative, rather than working direct, or have since chosen to become an appointed representative rather than be directly authorised themselves.”

Interestingly, the pace of authorisations appears to have accelerated in the 1st quarter of 2016. Of the 76 that now have full authorisation, 30 were authorised pre-Dec 2015, a further eight were authorised in January 2016, 20 in February and 18 in March.