The following examples highlight common activities that accountancy firms might undertake:
An accountancy firm might provide credit to individuals or partnerships to pay off their outstanding accountancy fees. The level, timing and nature of the credit may vary with each situation.
An accountancy firm may introduce or recommend an individual, sole trader or partnership to a third party so that they can obtain credit.
An accountancy firm might negotiate with creditors on someone’s behalf.
An accountancy firm might counsel or advise the individual relating to adjusting its debt. If debt-adjusting services are provided then debt counselling is also likely to be provided.
An accountancy firm might perform duties under a consumer credit agreement or a consumer hire agreement on behalf of a creditor or owner, or enforce rights under such an agreement on behalf of a creditor or owner so far as the taking of such steps is not debt collecting. Note that a firm acting in its own interest, for example administering loans where the firm is the creditor or owner, is not affected.
Provision of credit information services (including credit repair)
An accountancy firm might be asked to obtain information on behalf of an individual about their financial standing (eg credit-rating information), including asking a credit reference agency if it holds the information. This might also entail providing advice to individuals on how to seek to alter, or secure the omission of, the information, or how to seek to restrict the availability of the information.
The FCA stipulates that credit-related regulated activity means any of the following activities specified in Part 2 or 3A of the Regulated Activities Order (Specified Activities):
(a) entering into a regulated credit agreement as lender
(b) exercising, or having the right to exercise, the lender’s rights and duties
under a regulated credit agreement
(c) credit broking
(d) debt adjusting
(e) debt counselling
(f) debt collecting
(g) debt administration
(h) entering into a regulated consumer hire agreement as owner
(i) exercising, or having the right to exercise, the owner’s rights and duties
under a regulated consumer hire agreement
(j) providing credit information services
(k) providing credit references
(l) operating an electronic system in relation to lending
(m) agreeing to carry on a regulated activity so far as relevant to any of the
activities in (a) to (l).