Interest-free credit dealer information
As the new Foster and Gamko offering constitutes a hire purchase agreement, the Distributor may need to comply with the FCA regarding the introduction of financial services.
Who are the FCA?
The Financial Conduct Authority is a government department which regulates the conduct of the financial market. Financial markets need to be honest, fair and effective so that consumers get a fair deal.
Financial Conduct Authority (FCA) Permissions Guidance
Definitions according to FCA guidance:
- Foster and Gamko – ITW Leasing and Finance (the lender)
- Distributor – The authorised reseller of product(s)
- Consumer (End User) – the requester/user of financial services
- Limited Company (End User) – the requester/user of financial services
FCA compliance IS NOT required in the following circumstances:
End user is a Limited Company
A Limited Company is a private company whose owners are legally responsible for its debts only to the extent of the amount of capital they invested.
The promotion of financial services to Limited Companies is exempt from FCA permissions as it is a B2B agreement.
- There is no limit to the value of the agreement, subject to credit checks
End user is a Consumer
A Consumer is defined as a sole-trader or partnership with 3 or less people, where the order value is under £25,000.
- If the order value is above £25,000 the introduction of financial services is unregulated, and therefore the Distributor can introduce financial services to a Consumer.
- Where the order value is below £25,000 the Distributor may request a Foster and Gamko representative introduce the financial services available to the Consumer on account that Foster and Gamko have full FCA permissions. This removes the necessity for the distributor to attain FCA permissions.
- Please note that the above guidance also applies if the distributor is themselves a sole trader, as the FCA permissions are based upon the legal structure of the requester/user of the financial service.
FCA compliance MAY BE required in the following circumstances:
When the Distributor wishes to introduce Foster and Gamko financial services to the Consumer directly where the value is under £25,000, the Distributor has the option to seek FCA permissions themselves. More information can be found on the FCA website https://www.fca.org.uk/
The information within this communication is provided solely for general information purposes. This communication is not intended to constitute, and should not be construed as legal advice, investment advice, investment recommendations or investment research. Although the information in this communication is believed to be materially correct as at the date of issue, no representation or warranty is given as to the accuracy of any of the information provided. We recommend that you seek independent financial advice and we remind you that you are solely responsible for assuring compliance with any FCA requirements.