The SRA (Solicitors Regulation Authority) and the FCA (Financial Conduct Authority) have announced plans to extend the transition period for law firms working in the consumer credit debt recovery sector.
Law firms active in these market places will be given a further six months from 30th September 2014 to 1st April 2015 before needing to be fully regulated by the FCA.
Previously, Debt Collection activities have been carried out by law firms under a ‘group licence’ held by the Law Society and managed by the SRA as opposed to individual consumer credit licences being held as with most Debt Collection companies.
The Legal services board warned that when the FCA took over regulating and licencing ‘Debt Collection’ there would be some law firms who did not understand the impact and therefore there could be serious consequences as such.
Consumer Credit Debt Collection company that were previously licensable by the Office of fair trading must now be authorised by the FCA and have interim permission (as from April 1st)
Experts within the Debt Collection industry argue that a extension for solicitors is unfair and that due to the level of in depth information and compliance required with the new FCA regulations, private ‘run of the mill’ collection agencies should be allowed further transitional time also.