Under the Consumer Credit Act 1974 most businesses that provide goods and services on credit or for hire, lend money or provide debt collecting, debt counselling or debt adjusting services to consumers need to have a credit licence.

Trading in debt advice or credit activities without a credit licence is a criminal offence, for more information see penalties and requirements.

Traders are likely to need a consumers credit licence if they:

• sell goods or provide service on credit
• hire or lease out goods for more than three months
• lend money
• arrange credit for others
• offer hire purchase terms
• collect debts or purchase debts
• help people with debt problems such as advising on IVA or Bankruptcy
• advise people of, or help them find information on, their credit standing
• administer agreements (but do not collect debts).

Even if traders offering debt advice don’t charge for their services or are non-profit making, or they don’t do these activities all the time, they may still need a licence.

Traders are not likely to need a credit licence if they are:

• only planning to accept credit cards issued by other businesses
• only deal with limited companies.