IFAC are concerned by the steady increase in FCA fees, but it is as nothing to the fate of the consumer credit firms, who have seen their fees go up by multiples of 7x and 10x in just four years.
Here is the IFAC response to the FCA consultation paper CP21/33.
The FCA fees are due
to go up next year to Â£2200 minimum for all fee block Consumer Credit firms.
For the full permission consumer credit firms, for those with the lowest credit related income, this is an increase from Â£318 per annum last year, to Â£750 this year and Â£2,200 this next year.
That is a 6.9X increase.
Those with limited permissions, and with the lowest credit related income, in CC will see increase from Â£106 last year, to Â£250 this year, Â£500 next year and finally to Â£1100 â€“ at least a 2X increase year on year to 2023/24.
These increases are dramatic, to say the least. We expect 25% of all small CC2- only firms to resign because of this fee. That is 1,250 firms , and 25% of CC1 firms we expect to also resign.
We consider it questionable whether the timing would be enforceable in law.
The final date for resigning without being liable to this fee is 31st March 2022, but on page 5 of cp21-33 you will publish the decision â€œin our Handbook Notice in March 2022 or in the March/April 2022 CP on fee-rates.â€
This means that Firms, when they do finally determine the result of the CP will not be in a position, at that stage, to avoid them by resigning. Your PS will be announcing a retrospective charge. Any Firms that resign, it is felt, are likely to resist payment, and this may end up with you potentially taking them to the small claims court if the intention is to pursue for payment. Defendants will argue primarily that the CP was not conducted in a fair and transparent manner, and given the numbers involved these firms might decide to club together to bring a group action case.
IFAC help CC firms with their regulatory compliance.