asked Her Majesty’s Government:
Further to the Written Answer by Lord Jones of Birmingham on 22 October (WA 75), what are the specific circumstances in which an amateur golf club or other amateur sports club would be required to obtain a consumer credit licence. [HL161]
The OFT can offer general guidance on consumer credit licensing, but its advice cannot be taken as an authoritative view of the law. What is or is not regulated consumer credit business, within the meaning of the Consumer Credit Act 1974, is ultimately a matter for the courts. Whether or not a licence is required will be dependent on the individual circumstances applicable to the operation of each individual club. It is not possible to list all the specific circumstances that would require clubs to be licensed, since OFT cannot be aware of all the facts. Consequently, OFT would advise individual clubs to seek independent legal advice if they are in any doubt.
However, if a club is carrying on business, allows payment of membership fees in more than four instalments and its agreements are not subject to any exemptions, it may need a consumer credit licence. Guidance on exemptions is available in the OFT publication Regulated and Exempt Agreements (OFT140), which is available on the OFT website at www.oft.gov.uk/advice_and_ resources/publications/consumer_advice/money_credit_debt/oftl40.
Section 189(1) of the Consumer Credit Act 1974 defines “consumer credit business” as “any business so far as it comprises or relates to the provision of credit under regulated consumer credit agreements”. Whether or not a club is carrying on a business will be dependent on the individual circumstances applicable to the operation of each individual club. The main issue that clubs need to consider is whether their credit activity would be classified as “occasional business”. This will be a question of fact. In addition, clubs should be aware that they may still be classed as carrying on a credit business even if they are non-profit making or have charitable status. If individual clubs are in any doubt as to whether they are carrying on a consumer credit business, they should seek independent legal advice.