Lead Generators & Introducers

Not unlike most industries it is usual for consumer credit businesses to purchase leads from lead generators or to accept introductions of clients from third parties.  Where those lead generators or introducers are carrying out an activity which requires a consumer credit licence they must hold the relevant category of licence.  Failure to do so will amount to a criminal offence and the Office of Fair Trading may take enforcement action against any business that receives leads or introductions from unlicensed firms.  It does this on the basis that the unlicensed firm is an associate of the licensed firm.

Lead generators and introducers should not be confused with agents of a licensed firm.  Where a proper agency agreement exists, and the agent acts at all times for the principal firm and in the name of the principal firm, the agent will not require a consumer credit licence.  In the same way as an employee is an agent of its employer an external marketing agency which manages the licensed firms website, or an outsourced call handling facility, may act as an agent of the licensed firm.

It is important for any licensed firm to ensure that it has adequate due diligence in place in relation to the leads and introductions it receives from third parties, and for any arrangements which it has with any agent.Failure to do so exposes the licensed firm to a substantial risk of enforcement action being taken against it for a non-compliance committed by those external parties.  That due diligence should include an initial assessment of the suitability of the lead generator, introducer or agent and arrangements for ensuring their ongoing compliance.

If you need help in preparing or reviewing your arrangements with  lead generators, introducers and agents place please visit www.scottrobertllp.com for professional support or contact Scott Robert LLP on 0844 736 5327.