The government has decided that as a result of the closure of the Office of Fair Trading, there will be rebates given to some consumer credit licence holders. This is so firms do not have to pay twice to be regulated for the same period.
Certain consumer credit licence holders that have paid a licence fee (including maintenance payments) to the OFT in the five years prior to 1 April 2014 will be eligible, except for those lenders excluded from the scheme by the government. These are firms sent letters and visited by the OFT as part of its payday lending compliance review.
Additionally, the FCA does not intend to make payments to:
- Any firm where the rebate will be less than £10
- Firms that have had their licence applications rejected, or received a notice that OFT is minded to revoke or to refuse licences, until an appeal determines that decision was incorrect
- Firms that have had their licence suspended are also likely to have their rebate suspended, until an appeal determines that they will retain their licence.
A firm must hold a standard or group OFT licence:
- when a rebate is paid to them, if it is paid before 1 April 2014
- when they apply for a rebate, if they apply before 1 April 2014
- immediately before 1 April 2014, where they apply for a rebate or a rebate is paid on or after 1 April 2014
- on 23 April 2012 and have relinquished it or will relinquish by giving notice to the OFT before 1 April 2014.
Most OFT licensees will receive an email from the FCA about the scheme in the coming weeks, which will explain further how the rebates will work. If the FCA does not hold an email address for the firm, it will write to them in the New Year.
Automatic rebates: eligible firms that have completed their registration for interim permission will receive a cheque in the post from January 2014.
The FCA intends to calculate rebates for eligible firms based on the time between 1 April 2014 and the time left until the licence is due for renewal or until the next maintenance payment is due.