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HMRC internal manual

Money Laundering Regulations: Registration

The Scope of Money Laundering Regulations: Registration: Consumer Credit Institutions’ Activity carried out by MSBs

Some MSBs registered with HMRC, also carry out activities as consumer credit institutions such as pawnbrokers and cheque cashers. HMRC is the only supervisor for such businesses.

This means that when we check the compliance of MSBs that are also consumer credit institutions we must make sure that both activities are included in the businesses’ anti money laundering policies and processes.

Consumer credit institutions cover a wide range of transactions:

  • hire purchase
  • issuing credit cards
  • budget accounts
  • instalment sales
  • cash loans
  • subscription accounts
  • trading checks
  • overdrafts
  • personal loans.

To comply with the requirements of the Consumer Credit Act 1974, these businesses must have a credit licence and are sometimes referred to as category A licence holders.

The consumer credit institutions you are most likely to find carried out by MSBs are those providing short term high interest loans i.e. pawn broking, log book loans. payday loans and unsecured cash loans.

The Office of Fair Trading (OFT) is the only supervisor for all other consumer credit institutions unless they are FSA authorised businesses, so for example, a Pawnbroker who is not part of a MSB should be supervised by OFT (