How Does The CCTA Protect Me If I Apply For A Short Term Loan?
Any company providing credit must meet minimum standards provided by the Financial Conduct Authority or FCA. These standards assess a company’s business plan and ensure “fit and proper” people operate the business. This considers factors such as honesty, integrity and reputation, as well as competence, capability and financial soundness.
In order to legally provide credit, a company must first have the authorisation of the FCA. This means companies that want to offer credit to people have to be assessed by the Authority before they can. Any staff at a company responsible for making decisions about offering credit must also be deemed suitable to do so by the FCA.
Short-term financial solutions are ten a penny these days, with payday loans, Logbook Loans and other bills of sale all seen as viable options. But how do you make sure you’re protected from any potentially unscrupulous lenders and unpleasant, unforeseen, surprises?
The CCTA and how it works
Established in 1891, the Consumer Credit Trade Association (CCTA) seeks to improve compliance among financial lenders. It also acts as a lobbyist trying to improve and streamline legislation surrounding the industry.
A credit provider doesn’t have to join the CCTA, but it is good for a company to have a consumer membership with the Authority and something you should keep an eye out for.
To become a member of the CCTA, a lender must follow a strict code of conduct. This includes a general code of practice, as well as specific rules for bills of sale, such as those for a Logbook Loan. Members have to adhere to guidelines which ensure the following:
- Operate in accordance with strict compliance
- Operate responsibly
- Operate as an ethical lender
- Operate with a respect for confidentiality
- Operate with integrity as a business
Upholding these principles and adhering to the guidelines is essential for a lender to remain a member of the CCTA. In essence, this should help improve the quality of services the lender provides.
How does this protect me?
CCTA membership should be an indication of quality and something to look for when searching for a financial solution provider.
Choosing a provider who has CCTA membership should mean you are dealing with a company which prides itself of integrity and transparency. This should protect you from any unforeseen, nasty, surprises during the course of your dealings with them.
Providers associated with the CCTA are subject to compliance and regulation, which goes beyond minimum standards. The codes of practice in place are intended to ensure providers remain reputable, responsible and compliant, as a lender, but also protect the interests of the consumers with whom they work. To find out more about the CCTA visit their website.