Online Lenders

HOW WE CAN HELP YOUR BUSINESS TO SUCCEED


THE BRITISH CHEQUE & CREDIT ASSOCIATION (BCCA) IS THE ONLY “FULL SERVICE” TRADE ASSOCIATION WHICH SPECIFICALLY REPRESENTS MEMBERS’ INTERESTS IN THE AREA OF “PAY DAY LENDING”. AS A RESULT OF THIS, THE ASSOCIATION KNOWS AND UNDERSTANDS THE NEEDS OF PAY DAY LOAN BUSINESSES AND HOW WE CAN SUPPORT THEM.


The BCCA was established in 1994 and was involved with the development of payday lending in the UK from its inception as a ‘deferred presentation’ product (where the loan was repayable by cheque) to where we are today, with an increasing number of payday loans being repaid by debit card. When this loan product was introduced into the market, back in the mid-1990’s, the BCCA extended its remit (it was initially set up to represent the interests of third party cheque cashers) so that businesses offering payday loans on the high street could be included within its scope.


In 2008, as online payday lending was evolving in the UK, the BCCA further extended its remit to include all unsecured loan products where the intended repayment period was 6 months or less (excluding pawnbroking and home credit). This latest move allowed online and centralised businesses (i.e. those which do not operate from retail premises) to be represented by the BCCA, which we believe is the trade association best placed to promote and protect the industry.


A free “Guide to Business” in the UK

The BCCA has produced some very general guidance on the regulatory requirements with which all providers of consumer credit products have to comply. This is entitled “A Guide to Business – Short Term Lending”. Any business which has a genuine interest in applying for membership can obtain a copy of this document.


Applying for membership

If you would like a Membership Enquiry Pack, please contact us. 

IMPORTANT: It is our policy that all online businesses that apply for membership must have taken compliance advice from one of the following in relation to their operating policies, procedures and website:

  • A lawyer from a recognised firm OR
  • Their local Trading Standards department OR
  • A suitably qualified person e.g. a consultant

As part of the application process, we ask that written confirmation is provided to us from one of the above stating that compliance advice has been given to the applicant and that any issues raised by the advisor must have been addressed to their satisfaction at this stage. An application will not be able to progress without this. Further information about this policy is supplied via our Membership Enquiry Pack.

We take these steps as the BCCA only represents those companies which operate to high levels of compliance and which treat their customers fairly. This is vital, as the BCCA’s excellent relationships and reputation with government agencies, regulators and other organisations listed below rely upon it.

Banks and providers of card processing facilities (“merchant acquirers”) also recognise the care that the BCCA takes during the application process and, indeed, afterwards. Merchant acquirers which are considering applications for card processing facilities frequently treat BCCA membership as a very positive factor when assessing risk.


Advantages of membership

One of the big advantages of becoming a BCCA member is the knowledge that your Association is the focal point for the industry's contact with the UK government, local authorities, finance sector representative bodies and consumer organisations with an interest in the consumer credit industry. We also work closely with:

  • The Office of Fair Trading (OFT)
  • Her Majesty’s Revenue and Customs (HMRC)
  • The Department of Business, Innovation and Skills (BIS), which includes the high level Consumer Finance Forum
  • Her Majesty’s Treasury (HMT)
  • The Financial Services Authority (FSA)
  • The Financial Ombudsman Service (FOS)
  •  The Payments Council
  •  The UK Cards Association (formerly APACS)
  • The Association of British Credit Unions (ABCUL)
  • The Trading Standards Institute (TSI)
  • A wide variety of other regulatory and enforcement agencies, advice agencies, debt advice organisations and pressure groups.

Over the years we have developed excellent working relationships with all of the above by establishing and maintaining interaction with key contacts. The BCCA is also an active member of the highly influential Confederation of British Industry (CBI).

As a result of our network of contacts, we are always aware of issues which might impact on our members’ business at a very early stage and where we suspect that the impact might be negative, we vigorously lobby all relevant individuals and organisations. We try to make sure that our opinions are represented individually but also collectively by working with bodies/ groups that might also be affected. This ensures maximum effectiveness of any campaign we embark upon. 


A little history...........

The British Cheque Cashers Association (BCCA) was initially set up to represent the interests of businesses which cashed cheques payable to third parties. It is a mutual organisation which is owned and controlled by its members. As the BCCA’s remit expanded to cover what are generically called “pay day loans”, it became apparent that the Association’s name did not reflect its current remit. So, in 2009, we rebranded as the 'British Cheque & Credit Association' (BCCA) to better reflect the interests it represents. This meant that the 'BCCA' brand which is well recognised within the industry and with regulatory bodies and other relevant groups, including the media, could be retained. 


The Membership

The BCCA currently represents around 850 members. These range from quoted public companies to sole traders, many of which offer a range of loan and other financial products.

All BCCA members who offer payday loans, have to be licensed and regulated by the Office of Fair Trading (OFT), and are required to comply with the Association’s Constitution and Code of Practice.  In addition, all third party cheque cashers have to be registered as Money Service Businesses (MSB’s) with Her Majesty’s Revenue and Customs (HMRC). All members have to comply with UK and EU anti-money laundering laws.


The BCCA as a trade association

The BCCA is a full service trade association. It has a Consumer Code of Practice which members must adhere to and this is the version that is published on our website. The BCCA also has an Operational Code of Practice which is a working document for member’s eyes only. The BCCA does not have a separate Code of Practice as such for online payday lenders but has adapted its existing Code to ensure it is relevant.

The BCCA also has a robust Customer Complaints Procedure which is incorporated into the BCCA Consumer Code of Practice. As far as we are aware, we have a 100% record of successfully resolving disputes between members and their customers. This is important as complaints about regulated consumer credit products which cannot be resolved may be referred to the UK’s Financial Ombudsman Service at no cost to the borrower but could cost the lender £500, even if the complaint is not upheld.

We communicate with our membership via two quarterly publications; the BCCA Newsletter and the BCCA Members Only News Sheet. The BCCA Newsletter is circulated to politicians, government departments, trading standards services, media sources and the banking industry amongst others as well as all our members. It is very well regarded by senior civil servants and individuals in other relevant groups with which we have contact. It acts as a vehicle for getting our points of view across as well as keeping members up to date and being (hopefully) an enjoyable read! The News Sheet is about keeping members informed about how we are working for them and specific issues that they should be aware of.

The BCCA provides a whole host of compliance information and advice for members in relation to the Consumer Credit Act, anti-money laundering and other legislation. We also offer practical advice via published guidance on issues such as dealing with the media. All BCCA members are encouraged to contact the office for advice on compliance issues and general legal matters. Members also have access to a Business Support Helpline which is supplied via Croner Consulting. Here members can get access to legal advice on a wide range of issues, from the UK’s highly complex employment law to those relating to tax and VAT. This service is included in the BCCA membership fee and there is no limit on the length of a call or how many times you can ring it.

The BCCA also offers other member benefits such as: the right to use the BCCA logo on your website and on all your promotional material and documentation; access to discounts with some of the main ID verification service providers; discounted website design through our arrangement with www.sitewizard.co.uk; discounted rates on airport parking, airport hotel and parking packages and airport executive lounges through our arrangement with APH.

We also have an annual Conference (usually in November), offer a wide variety of training courses run by the Institute of Credit Management and Consumer Credit Trade Association at members’ rates and discounted membership to the Forum of Private Business (FPB) - (£50 for basic membership (normal rates £100) and £100 for membership to include legal expenses insurance cover (normal rates £200) is available to BCCA members. FPB benefits also include access to:

  •  Very low credit and debit card processing rates
  • A great telecoms deal
  • Cheaper utility supplies
  • A fully-managed payroll service at highly competitive prices
  • Insurance products
  • Non-core purchasing service
  • Telephone helpline for all business problems
  • Business rates advice 
  • For the full range of benefits go to -  www.fpb.org/benefits

The UK legislative scene

The UK has a comprehensive and complex regulatory system.  The regulation and licensing of consumer credit businesses goes back to 1974 and has developed as this area of commerce became more complex. For example, there are strict laws on advertising loans (including on websites), the form and content of credit agreements and debt collecting. Additionally, Regulations cover anti-money laundering, unfair contract terms, e-commerce (again including information to be included in websites) and “unfair trading”. The penalties for non-compliance can be dire so full compliance is essential and it is important that businesses take advice from a professional.

As we mentioned above, to help you understand what is involved, we have published “A Guide to Business – Short Term Lending”, which can be obtained free of charge from the BCCA for those businesses that have a genuine interest in becoming a member. 


Current threats to the industry

During 2008, the pay day lending industry came under the media and political spotlights more than ever before. There has at times been intense interest in lenders and short term loan products, mainly due to high APRs. Critics have included anti industry pressure groups, politicians, consumer journalists and even the Archbishop of Canterbury. This has continued in 2009.

There have been calls in Parliament for interest rate caps but this is considered unlikely in the medium term. However, the Office of Fair Trading has launched a wide ranging “study” into “Irresponsible Lending” in 2009. After consultation, final guidance should be published by the OFT in 2010. The BCCA is, of course, fully involved. Nevertheless, this will not stop media interest.

The EU Consumer Credit Directive is due to come into force across the whole of the EU in June 2010. We have yet to see how this will translate into UK law and what practical effect it will have, particularly in the field of “responsible lending” but the BCCA is fully involved with the Department of Business, Innovation and Skills which is responsible for drafting the legislation. We do, however, have concerns about the possible increase in the regulatory burden imposed by the Directive.


Business Conditions

The UK has a well established, thorough and effective regulatory system for consumer credit products. The Office of Fair Trading, the principal regulator, actively promotes competition and innovation and there is no desire to prohibit any particular product per se.  However, the OFT is very active and will come down heavily on any lender which does not comply with its legal obligations or treats consumers unfairly. The BCCA, which promotes a high standard of business ethics, supports this type of action as any malpractice is a threat to the industry (and hence BCCA members) as a whole.

The UK has a highly developed and competitive consumer credit industry, probably the most sophisticated in the world. Overall, the UK has an enlightened approach to consumer lending and is therefore a good place to do business, providing high standards of business are maintained.

                                                          Fee Structure


Online Lender Membership fees

BAND VALUE OF LOANS ADVANCED IN PREVIOUS 12 MONTHS (UK only) ANNUAL FEE (+17.5% VAT) *(+20% VAT)           
A£0 - £5m£1,500
B£5m - £20m£3,000
C£20m - £30m£7,500
D£30m - £100m£10,000

  1. This fee structure will apply to those businesses which are not retail premises based e.g. internet lenders.
  2. Those which operate High Street premises will continue to pay fees calculated on the number of premises in operation.
  3. Businesses will themselves decide which band they fall into. The "value of loans" relates to advances made in the previous twelve months. The BCCA will not normally require evidence in support of that decision.
  4. Those lenders which pay the Band A or Band B fee for two years in succession will automatically be charged the Band C fee in subsequent years, unless they can produce evidence to prove that they should remain in the lower band.
  5. Fees are payable on *1 January each year. Businesses which apply for membership during the year have to include the full year's fee with their application and a pro-rata rebate will be offset against the following year.

*From January 2011

To access a copy of the BCCA Consumer Code for Short Term Lenders – please click on the document below

Download BCCA Code of Practice for Short Term Lenders

Further Information

Please contact us on 01244 505904 or via email at info@bcca.co.uk.