Consumer Credit VOP

For those of you who are currently going through the pain of the Variation Off Permission for Consumer Credit, here is a little thought to add to it.

There are exemptions on debt-counselling when it relates to the effecting of a regulated home finance contract and so technically you might not need to seek this part of the permission. However, the exemption does not apply to BTL mortgages at all, or to second charges until 21st March 2016 when the Mortgage Credit Directive takes effect.

I also have a concern regarding the wording of the exemption in those cases where you are unable to recommend a regulated mortgage to the client because they are ineligible with lenders yet your firm has undertaken some form of debt counselling... e.g "I recommend that you consolidate your debts into a single loan but I cannot recommend a mortgage to you." ( This is one of the examples in PERG 17)

However, if you apply for Debt Counselling you can possibly expect the full treatment from the FCA because it gives you the right to do all sorts of things. You don't necessarily want to have to explain your procedures and controls and so on for undertaking activities that you will never use and so the best way to deal with it is probably by including a non-standard limitation on your permission under debt counselling.

Just a thought in this run up to the festive season but if this remains unintelligible, please feel free to contact me.