Managing referrers has become important to credit providers (discussed here and here).

It’s worth keeping the following points in mind:

1. The exemptions from licensing for referrers in Regs25(5) and 9AB (and the conditions you must comply with) only deal with “upstream” referrers (where referrers provide a credit provider with a potential customer’s details and the credit provider then contacts the potential customer). “Downstream” referrals (where a referrer gives a lender’s details to a potential borrower) are covered by Regulations 25(2)and (2A).

2. Licensees should be particularly careful with advertising by a referrer. If a referrer advertises the availability of credit the advertisement could be both a ‘credit advertisement’ for NCC purposes and a referral for NCCPA purposes, depending upon its content. These are not covered by Regulation 25(5)

3. Nothing in Reg 25 (which is limited to licensing issues) changes the linked credit provider/supplier relationship provisions. If a linked supplier advertises the availability of credit it can lead to linking under Part 7 of the NCC and section 73 of theTPA.