A bit of a random request, but wondering if there were any non-motoring credit specialists on the forum?

For my sins, I have just taken over as treasurer of the village community shop and on chasing up a late account (8months overdue) the individual concerned has accused us of illegally offering unauthorised credit and contacted the FCA. Needless to say he is trying to get out of paying the bill.

Fairly sure we haven't anything wrong but would like to get a second opinion (or find out where to go to get such advice) as it's not my area of expertise at all. FCA won't give a definative answer yet, and I'd rather not end up in court less than 2 months after taking over!

Thanks in advance for any comments. David

2012 Range Rover Westminster 4.4TDV8
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2021 Mazda CX-5
2003 Porsche Boxster

Not really my area, but a few basic questions.

Did the shop offer a credit facility - or did he just have a bill that he didn't pay "

Has any interest been charged ?

And presumably the primary purpose of the venture is not to lend or provide other financial services ?

Sounds like a stalling tactic and you have done nothing wrong

One of my businesses is an I.T. Shop. Back in 2002 I allowed someone to buy a computer and to pay us over 6 monthly instalments with zero interest charged. I had done this sort of thing a few times, not very often but I suppose at the time we had 3 or 4 such accounts active. We had a visit from the FCA and we were told in no uncertain terms we should have a license as a credit broker for any such sales, we were warned of dire consequences if we didnt comply. We have never done any such transactions since then. It may well be different for a community shop, I dont know, for me though it was bad news. BMW i3 Electric Car
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There were changes to consumer credit laws a few years back, it all depends on how the debt was created. If it was an “account” , then by definition, you now require a consumer credit license. Seems daft but that’s how it is.

The accounts are just that, a convenience for the village residents to buy their newspapers and jaffa cakes. We ask that they are paid of before the end of the month and ask that they are settled in one payment. Charges/interest don't even come into it. I'm sure it's a bit like the milkman delivering milk and then invoicing at the end of the month (not my example, but the Citizens Advice!).

Alistair, I was thinking along the same line, but fear we will need to seek a license, and think we may get a rap on the knuckles from the FCA for our troubles. So annoying  David

2012 Range Rover Westminster 4.4TDV8
2004 Range Rover Vogue 4.4 V8 (LPG) (Not quite gone)
2021 Mazda CX-5
2003 Porsche Boxster

That’s the the thing, by definition, you are extending credit by allowing a balance to accrue, it’s nothing to do with interest at all sadly, seems really daft, but you can thank our glorious lawmakers for that.

I should have the FCA out to my dog walker, the guy who cleans my bins and the milk man then!

The world has gone mad..

Yup, it really is crackers.

TJH1985, we are talking about Devon though.......

Jim

It will very much depend on what is documented and can be provided as evidence. For example, if there’s a clause that you retain ownership until full payment has been received, then you haven’t provided credit, the person has simply taken goods and not paid.

Alternatively if you send a bill, then I think interest (or lack of) is relevant.

Alternatively, maybe argue that you’re offering instalment credit - albeit one instalment... though the fixed amount may be a bit difficult.... unless every transaction is a separate implied agreement payable a month later ?

https://www.fca.org.uk/firms/authorisation...ent-credit

Is there any actual written agreement / contract ?

A quick look at the FCA website suggests to me that there is no regulatory issue here and that the debtor is simply attempting to avoid payment.

If it were otherwise every small business that allows credit would be obliged to register and that is not the case.

Like you Alistair/Martin, did some research this morning and there are some exemptions that the FCA apply and the one that I think that we fall under this one:

2) Credit agreement is Exempt from requiring FCA authorisation if:
(a) the agreement is a borrower-lender-supplier agreement for running-account credit;
(b) the borrower is to make payments in relation to specified periods which must be, unless the agreement is secured on land, of three months or less;
(c) the number of payments to be made by the borrower in repayment of the whole amount of credit provided in each period is not more than one; and
(d) the credit is:
(i) secured on land; or
(ii) provided without interest or other significant charges;

So as we satisfy b,c and d(ii) fairly confident that we are ok, and having just spoken to the FCA they are leaning towards this as well, although they won't commit one way or another unless they are conducting an investigation!

Thanks for all your points of view so far (even the one about Devon!).  David

2012 Range Rover Westminster 4.4TDV8
2004 Range Rover Vogue 4.4 V8 (LPG) (Not quite gone)
2021 Mazda CX-5
2003 Porsche Boxster

It sounds like this is a stalling method from the buyer that they have used before to cause short term confusion and delay.

If it were me I would go in with a firm hand and reply swiftly with confirmation of your next step to recover the debt.

Agreed specman, have given him until Friday to pay and if nothing received we wil take it to the next stage via the small claims process. David

2012 Range Rover Westminster 4.4TDV8
2004 Range Rover Vogue 4.4 V8 (LPG) (Not quite gone)
2021 Mazda CX-5
2003 Porsche Boxster

I’ve used the small claims route a couple of times, the court can get a bit funny about allowing “reasonable time” for payment after your final demand. I was advised to give a months notice in writing.