Consumers are currently facing a cost-of-living crisis meaning access to the credit is as vital as ever. This is why many firms choose to introduce their customers to credit providers. Firms that offer these introductions are known as credit brokers. Firms that introduce their customers to credit providers in the home are classed as ‘domestic premises suppliers. Firms that wish to undertake this activity must be authorised by the Financial Conduct Authority (“FCA”) or act as an Appointed Representative (“AR”).
Domestic Premises Suppliers
A domestic residence supplier is defined by the FCA as;
“a supplier who sells goods or supplies services to customers who are individuals while physically present in the dwelling of the customer or in consequence of an agreement concluded whilst the supplier was physically present in the dwelling of the customer (though a supplier who does so on an occasional basis is not to be treated as a ‘domestic premises supplier’)”.
This means that a firm which discusses credit options with their customers in the customers’ home, even where they only offer a quotation or an introduction and no paperwork is completed in the customers home, are classed as a domestic premises supplier. Domestic premises suppliers are deemed as ‘higher risk’ compared to other firms undertaking credit broking as there is a higher risk of poor consumer outcomes. For example, consumers who have a firm representative in their home may feel pressured to make a purchase or agree to services which may not be suitable for them.
This increased risks to consumers means that the FCA have higher expectations of domestic premises suppliers. Firms should have in place specific policies and training tailored towards the risks associated with selling in customers’ homes. This means that these firms must have more prescriptive guidance for employees involved in this activity and an increased level of compliance monitoring.
Consumer Credit Compliance assists firms within our Appointed Representative network in creating and implementing appropriate risk controls and monitoring to ensure that they are confident in assisting their customers in the home. We work with a large number of domestic premises suppliers in ensuring their business complies with the FCA’s highest standards. Get in touch today to discuss how joining our network can support your business growth.
