IN THE MATTER OF THE CARE ACT 2014 AND IN THE MATTER OF THE CONSUMER CREDIT ACT 1974 ___________ ADVICE ___________ I am asked on behalf of the National Association of Financial Assessment Officers to comment upon the following: There is conflicting views around whether the deferred payment scheme falls under the consumer credit act or not. The Department of Health have stated that they feel if only land or property is taken into account that they will not fall under consumer credit act, but that if they take other forms of security into account they will. Can you give counsels opinion on what direction local authorities should be considering. The Care and Support Statutory Guidance relied upon by the Department of Health states: 9.81. Local authorities will need to consider whether the deferred payment agreements they enter into are regulated credit agreements to which the Consumer Credit Act 1974 (CCA) and Financial Services and Markets Act 2000 (FSMA) apply. 9.82. The scope of credit agreements’ is set out in article 60B of the Financial ‘regulated Services and Markets Act 2000 (Regulated Activities) Order 2001 (‘the RAO’). A credit agreement is regulated unless exempt, and there are a number of exemptions in articles 60C to 60H of the RAO. It is likely that most DPAs will fall within such an exemption. If the agreement is regulated, it will need to comply with all applicable requirements of the CCA. In addition, the local authority will need a relevant permission from the Financial Conduct Authority (FCA), and to comply with the FCA’s rules and principles, unless the exclusion in article 72G of the RAO applies ( if the credit agreement is within the scope of the Consumer Credit Directive FCA authorisation is required). The first question that must be addressed is whether the deferred payment agreement proposed is a credit agreement’. ‘regulated
IN THE MATTER OF THE CARE ACT 2014 AND IN THE MATTER OF THE CONSUMER CREDIT ACT 1974 ___________ ADVICE ___________ I am asked on behalf of the National Association of Financial Assessment Officers to comment upon the following: There is conflicting views around whether the deferred payment scheme falls under the consumer credit act or not. The Department of Health have stated that they feel if only land or property is taken into account that they will not fall under consumer credit act, but that if they take other forms of security into account they will. Can you give counsels opinion on what direction local authorities should be considering. The Care and Support Statutory Guidance relied upon by the Department of Health states: 9.81. Local authorities will need to consider whether the deferred payment agreements they enter into are regulated credit agreements to which the Consumer Credit Act 1974 (CCA) and Financial Services and Markets Act 2000 (FSMA) apply. 9.82. The scope of ‘regulated credit agreements’ is set out in article 60B of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (‘the RAO’). A credit agreement is regulated unless exempt, and there are a number of exemptions in articles 60C to 60H of the RAO. It is likely that most DPAs will fall within such an exemption. If the agreement is regulated, it will need to comply with all applicable requirements of the CCA. In addition, the local authority will need a relevant permission from the Financial Conduct Authority (FCA), and to comply with the FCA’s rules and principles, unless the exclusion in article 72G of the RAO applies ( if the credit agreement is within the scope of the Consumer Credit Directive FCA authorisation is required). The first question that must be addressed is whether the deferred payment agreement proposed is a ‘regulated credit agreement’.
DPAs%20and%20the%20CCA%20(Advice%2018%2012%2014).docx