Consumer Credit Authorisation in the UK: Steps and Requirements (2026)

Consumer Credit Authorisation in the UK: Steps and Requirements (2026)

A business that carries on consumer credit activities in the United Kingdom, such as lending to consumers, credit broking, debt collection, debt counselling or hire, generally needs to be authorised by the Financial Conduct Authority. Consumer credit has been regulated by the FCA since it took over from the Office of Fair Trading in 2014, and the regime combines the FCA's rules, principally the Consumer Credit sourcebook known as CONC, with the surviving provisions of the Consumer Credit Act 1974. Authorisation comes in two forms, limited permission and full permission, depending on the activities the firm carries on, and the process requires the firm to demonstrate that it meets the FCA's threshold conditions and can treat customers fairly and deliver good outcomes.

This guide explains who needs consumer credit authorisation, the difference between limited and full permission, the steps involved, and what the FCA expects. It is written for firms carrying on or planning consumer credit activities in the UK.

Who needs consumer credit authorisation

Consumer credit regulation covers a wide range of activities, and a business generally needs authorisation if it carries on any of them by way of business. These activities include lending to consumers under regulated credit agreements, credit broking, operating an electronic system in relation to lending, debt adjusting, debt counselling, debt collecting, debt administration, providing credit information services, and consumer hire. Because the perimeter is broad, businesses whose main activity is not financial services, such as retailers offering finance or firms introducing customers to lenders, can nonetheless be caught and require authorisation or an exemption. Establishing whether an activity falls within the regulated perimeter is the essential first step, because carrying on a regulated consumer credit activity without authorisation is a criminal offence.

Limited permission and full permission

The consumer credit regime distinguishes between two types of permission. Limited permission applies to lower-risk activities, for example certain types of credit broking carried on by businesses whose main business is selling goods or non-financial services, and to some not-for-profit debt work. It involves a lighter application and lower ongoing requirements. Full permission applies to higher-risk activities, including most lending, debt collecting, debt counselling and debt adjusting, and to credit broking that is the firm's main business. It involves a more thorough application and more extensive ongoing obligations. Determining which permission a firm needs, based on the specific activities it carries on, is central to the application, because applying for the wrong permission causes delay and cost.

The threshold conditions and what the FCA expects

To be authorised, a firm must satisfy, and continue to satisfy, the FCA's threshold conditions, the minimum standards for being and remaining authorised. In practice, the FCA expects a firm to demonstrate a viable and clearly described business model; adequate financial and non-financial resources; fit-and-proper individuals in key roles; effective systems and controls, including for compliance and financial crime; and the ability to treat customers fairly and, where applicable, meet the Consumer Duty. For consumer credit specifically, the FCA places significant weight on how a firm assesses affordability and creditworthiness, how it treats customers in financial difficulty, how it communicates with customers, and how it handles complaints. The Senior Managers and Certification Regime applies to consumer credit firms, so the firm must also allocate senior management responsibilities appropriately.

The steps to authorisation

Obtaining consumer credit authorisation involves a sequence of steps. The firm first confirms that its activities fall within the regulated perimeter and identifies whether it needs limited or full permission. It then prepares the application, which includes a description of the business and its activities, financial information, details of the individuals to be approved, and the policies and procedures that evidence compliance, such as affordability assessment, treating customers fairly, financial crime and complaints handling. The application is submitted to the FCA with the relevant fee, and the FCA reviews it, commonly raising questions and requests for further information. The firm must respond to these promptly and completely. On approval, the firm is authorised with the relevant permissions and enters ongoing supervision.

Ongoing obligations

Authorisation brings continuing obligations. A consumer credit firm must comply with the CONC rules relevant to its activities, the FCA's Principles for Businesses, the Consumer Duty where it serves retail customers, and financial crime obligations. It must assess affordability and creditworthiness appropriately, treat customers in financial difficulty fairly, communicate clearly, and handle complaints in line with the FCA's rules, with unresolved complaints able to be referred to the Financial Ombudsman Service. It must maintain fit-and-proper individuals, operate the Senior Managers and Certification Regime, submit regulatory returns, and notify the FCA of material changes. Consumer credit is an area of active FCA supervision, particularly around affordability, treatment of customers in difficulty and high-cost credit, so ongoing compliance is as important as the authorisation itself.

How Buckingham Capital Consulting can help

Buckingham Capital Consulting advises firms on consumer credit authorisation and compliance. We help firms determine whether their activities fall within the regulated perimeter and whether they need limited or full permission, prepare and manage the FCA application, including the business description, financial information and the policies and procedures the FCA expects, and advise on the individuals to be approved. After authorisation, we support firms with ongoing compliance, including the CONC rules, affordability and creditworthiness, treating customers in financial difficulty, the Consumer Duty, the Senior Managers and Certification Regime and regulatory reporting.

If you carry on, or plan to carry on, consumer credit activities in the UK, contact our team for an initial assessment of the authorisation you need.

Email: info@buckinghamcapitalconsulting.co.uk.

Frequently asked questions

Who needs consumer credit authorisation in the UK?

A business generally needs FCA consumer credit authorisation if it carries on a regulated consumer credit activity by way of business. These activities are broad and include lending to consumers, credit broking, operating an electronic lending system, debt adjusting, debt counselling, debt collecting, debt administration, providing credit information services and consumer hire. Because the perimeter is wide, businesses whose principal activity is not financial services can be caught, for example retailers that offer finance to customers or firms that introduce customers to lenders. Establishing whether a particular activity falls within the regulated perimeter, and whether any exemption applies, is the essential first step, because carrying on a regulated consumer credit activity without the necessary authorisation is a criminal offence and exposes the business and its officers to serious consequences.

What is the difference between limited and full permission?

The consumer credit regime has two types of permission. Limited permission applies to lower-risk activities, such as certain credit broking carried on by businesses whose main business is selling goods or non-financial services, and some not-for-profit debt work; it involves a lighter application and lower ongoing requirements. Full permission applies to higher-risk activities, including most lending, debt collecting, debt counselling and debt adjusting, and credit broking that is the firm's main business; it involves a more thorough application and more extensive ongoing obligations. Which permission a firm needs depends on the specific activities it carries on, and identifying the correct permission at the outset is important, because applying for the wrong one causes delay, additional cost and, sometimes, the need to reapply.

How long does consumer credit authorisation take?

The time taken depends on the permission sought and the quality of the application. The FCA has a statutory maximum determination period, but the actual elapsed time is driven heavily by the completeness of the application and how promptly the firm answers the FCA's questions. A limited permission application is generally lighter and faster than a full permission application, which involves more thorough scrutiny of the firm's business model, resources, systems and controls, and key individuals. As with other FCA authorisations, the single most important controllable factor is the quality of the application at submission: a complete, coherent application supported by credible policies and procedures moves through the process more quickly than one that leaves gaps for the FCA to query, which extends the timeline.

What does the FCA look at in a consumer credit application?

The FCA assesses whether the firm meets, and will continue to meet, its threshold conditions. It looks for a viable and clearly described business model, adequate financial and non-financial resources, fit-and-proper individuals in key roles, and effective systems and controls, including for compliance and financial crime. For consumer credit specifically, the FCA places significant weight on how the firm assesses affordability and creditworthiness, how it treats customers in financial difficulty, how it communicates with customers, and how it handles complaints, together with its ability to meet the Consumer Duty. The firm must also apply the Senior Managers and Certification Regime and allocate senior management responsibilities appropriately. In short, the FCA is concerned not only with whether the firm can carry on the activity, but with whether it will deliver fair treatment and good outcomes to consumers.

Does the Consumer Duty apply to consumer credit firms?

Yes. The Consumer Duty applies across retail financial services and captures consumer credit firms dealing with retail customers. Such firms must act to deliver good outcomes across the Duty's four outcomes, covering products and services, price and value, consumer understanding and consumer support, and must monitor the outcomes their customers actually receive and produce the annual Consumer Duty board report. In the consumer credit context, the Duty reinforces existing expectations around affordability, fair treatment of customers in financial difficulty, clear communication and appropriate support. Given that many consumer credit customers may be in vulnerable circumstances, the FCA regards good outcomes in this sector as an important supervisory priority, and consumer credit firms should treat the Duty as a core, ongoing obligation that sits alongside their CONC and wider regulatory responsibilities.