Our customers often ask us for advice when they receive an email from the FCA telling them they need to submit their reports.
The reporting is fairly straightforward but some of the questions can be ambiguous, so we’ve outlined the guidance we give most merchants using Deko for standard point of sale financing below.
This reporting helps the FCA to ensure your permission is still correct and that you’re meeting the requirements of your authorisation. They also monitor the market, looking out for any red flags that could cause a risk to consumers.
- This advice is just for merchants using standard point of sale finance and with FCA limited permission authorisation in relation to consumer credit.
- All questions refer to the reporting period outlined in the communications from the FCA. This is usually 12 months but could be quarterly or 6 monthly depending on the size or nature of your business.
- If you have any specific questions please speak to a compliance specialist.
To complete FCA reporting you will need to answer the following 6 questions.
1. Revenue from credit-related regulated finance
This relates to any income received through the act of offering finance. It does NOT refer to revenue for selling goods and services that the customer simply pays for on finance, unless there are any specific commission payments earned. Merchants offering interest free, low rate or classic credit finance options will not be earning any revenue from credit-related activities.
2. Total revenue (including activities other than credit-related regulated activities)
This refers to your total business turnover (whether sales are made on finance or not).
3. Number of transactions involving credit-related regulated activities in reporting period
Limited permission authorisation from the FCA allows companies to offer credit that is interest bearing or where the term is over 12 months. These loans are known as regulated. Interest free loans under 12 months duration are exempt.
This question asks you to state the number of completed sales that were paid for with a regulated finance loan option (ie one that’s interest bearing and/or over 12 months in duration).
4. Number of complaints related to credit related activities received in the reporting period
The number of complaints about your products or services from customers who have used finance as their payment method.
5. Credit-related regulated activity carried out in relation to the greatest number of customers in reporting period
This question is asking what type of finance activity you perform. Customers just using Pay4Later for standard consumer financing should select ‘Secondary credit broking’.
6. Total annual income as defined in FEES 4 Annex 11BR for the purposes of FCA fees reporting
This one sounds confusing. It actually means:
- Revenue from credit-related regulated finance (answer to Q1)
- Any ongoing commission received from finance sales made before the reporting period
- Any value of any goods exchanged where commission or other finance related payments have been waived or discounted.
How and when to submit your reporting
The Gabriel tool has been set up by the FCA to help companies report on their regulated activities. The FCA will email the nominated contact for your company when your reporting is due. If you want to find out when this will be you can log in today and check timescales. You’ll have about a month to provide the information required and the FCA will notify you when it’s due. If you don’t hit the deadline there is a £250 fine and if you still don’t submit you risk losing your FCA authorisation. If this were to happen you’d no longer be able to offer finance as a method of payment for your customers. Nobody wants that!
We often get asked about Gabriel reporting so we’ve tried to decipher the FCAs questions as we know they can be confusing. We’re not compliance experts though so if you’re unsure about any of your responses or have any further questions the FCA are happy to answer questions directly and can be contacted on the details below.
Telephone FCA UK on 0300 500 0597
FCA online training video to help you