Ignorance is not bliss with FCA regulations

School Fee Plan (SFP), part of Premium Credit Limited, looks at Financial Conduct Authority regulations

Don’t sleepwalk into regulatory issues with the Financial Conduct Authority (FCA) – old split-fee payment arrangements might land you in trouble and the FCA have started knocking on school doors.

Ignorance will not be bliss for schools picked up for non-compliance by the FCA and the FCA are turning their attention to independent schools.

For more than two decades, School Fee Plan (part of Premium Credit Limited) has been helping parents and schools when it comes to the paying of fees, with over 450 schools – around 20% of the independent sector – using the service.

For some schools, however, their fees-payment operation may have developed historically, often from a single set of parents in need of flexibility turning to them for help. An ad hoc arrangement made back then, with the school charging a modest fee for this service, could mean you are now contravening FCA regulations.

For Gavin Worrall, Head of Education Services at Premium Credit Limited, complacency can lead to catastrophe, with schools particularly vulnerable to the threat of bad publicity which can seriously harm their brand: “Where we identify such a situation, we tell heads, governors and bursars, “Guys, don’t wait for the FCA to make an example of this sector.” 

Some administrative staff think the FCA will not come after them, as it has bigger fish to fry, but it has started investigating schools recently. The newspapers could have a field day, writing about a school charging parents tens of thousands of pounds of interest without the necessary authorisation and permissions from the FCA; acting in a way which suggests it thinks it is above the law.

The financial repercussions can be heavy with FCA fines bearing no relation to the fee income generated. “While it was in the financial, rather than the education, sector, the FCA has taken its first criminal action against an individual allegedly acting as an unlicensed consumer credit lender, so schools need to be aware of the penalties they may incur if not being compliant with the rules and regulations of the FCA,” said Gavin.   

When schools work with School Fee Plan, it means both can play to their strengths. 

“We’ve been doing what we do for 20 years and have a strong focus on maintaining a proposition that complies with the applicable consumer-credit laws and regulations. Schools are educators, so schools using us have one less headache to worry about and are free to do what they are there to do – educate,” continued Gavin. “We are regulated by the FCA but schools trading with us don’t necessarily have to be.”    

The application process is very straightforward: 

  • The schools aren’t involved at the outset – the parent applies to us online and only when approved do we notify the school that they can tell us how much they need to fund. 
  • Fees can be added to the credit agreement each term, for as long as the parent wishes. What’s more, the parent can sign the credit agreement electronically, from the comfort of their mobile phone.  

Unsurprisingly, given this multitude of benefits, parents and schools choosing School Fee Plan have provided some ringing endorsements. For example, Joanne Pumphrey of Teesside High School said: “We have been using School Fee Plan for several years now. It is a great option for the school as it cuts down the time we need to spend collecting fee payments and is also preferred by an increasing number of our parents as it allows them to spread the cost of their school fees and make convenient monthly repayments.”  

School Fee Plan has been the leading provider to private schools and their pupils’ parents for the past 20 years.

E: gavin.worrall@pcl.co.uk
T: 07884 583195
W: premiumcredit.co.uk

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