The Consumer Credit Act 1974 (the Act) requires businesses that offer goods or services on credit or lend money or are involved in activities relating to credit or hire to be licensed by the Office of Fair Trading. Under the Act the OFT can impose requirements upon a licence or determine to refuse/revoke a licence if an applicant or licensee is considered unfit to hold a licence.
Assessment regarding the fitness of applicants and licensees is based upon:
Below is an outline of current and recent action undertaken by the OFT.
For more information and the OFT guidance for licensees and applicants, please refer to our Consumer credit licences section and the OFT policy on civil penalties (pdf 110kb).
To search the OFT Public Register for licensing information, please visit our Consumer credit register.
OFT acts to revoke Yes Loans' licence
The OFT has decided that Yes Loans Limited, one of the UK's largest brokers of unsecured credit, is unfit to hold a consumer credit licence, as are two associated businesses, Blue Sky Personal Finance Limited and Money Worries Limited. The decision to revoke the licences was taken in light of evidence that Yes Loans has failed to comply with the Consumer Credit Act 1974 and associated regulations, and with requirements previously imposed by the OFT. The OFT's decision to revoke the licences is subject to appeal and does not finally take effect until the end of any appeal process. For more information, see press release OFT acts to revoke Yes Loans' licence.
Enforcement action against Bridging Loans Limited (BLL)
The OFT has decided to revoke the licences of Glasgow mortgage lender, Bridging Loans Limited (BLL) and four associated companies. These companies specialise in first and second charge bridging loans which are short-term loans secured on property. BLL and the four associated companies have appealed against the OFT decision to revoke their licences. The decision to revoke the licences will not take effect unless the appeal is determined in the OFT's favour.
OFT participates in EU-wide investigation of websites offering consumer credit
The OFT participated in a Europe-wide sweep of websites that advertise consumer credit as part of an EU-wide investigation to check whether consumers are given the information to which they are entitled under EU consumer law. The OFT and other national enforcement authorities will report back to the European Commission by autumn 2012 regarding any follow up enforcement action. The Commission will report on the results of the investigation. The OFT will publish details of any resulting enforcement action completed in due course. For more information see europa.eu.
Enforcement action against Emerald Motor Company Limited
The First-tier Tribunal has upheld the OFT's decision to revoke the licence of Emerald Motor Company Ltd (EMCL) in Southampton. Read the Tribunal's decision.
Update on enforcement action against NIZ/ First Money Limited
In an update to the press release OFT warns credit brokers about unfair practices (11 February 2011), both companies appealed the OFT's decision to revoke their licences. First Money Direct has since withdrawn its appeal and the appeal by NIZ was struck out by the First-tier Tribunal. Neither NIZ nor First Money Direct are now licensed to carry on consumer credit activity.
The OFT has powers to impose requirements on a trader where the OFT is dissatisfied with any matter in connection with a business. The OFT may require a business to do or not to do (or to cease doing) anything specified for purposes connected with addressing the matter with which the OFT is dissatisfied, or securing that matters of the same or a similar kind do not arise. When imposing requirements, the OFT will either issue a notice to the trader setting out the requirements which it is minded to impose and the reasons for the proposed requirements, and inviting representations to an independent OFT adjudicator, or may bypass this procedure if the trader itself proposes requirements which are acceptable to the OFT.
Where there are substantiated doubts about a trader's fitness, the OFT issues a 'Minded to Refuse' or 'Minded to Revoke' Notice (MTR). This is a formal notice advising the applicant or licensee that the OFT is minded to refuse to grant them a licence or is minded to revoke their existing licence and inviting them to make representations to an independent OFT adjudicator who will make a decision on the case (see below). The trader retains their licence until the adjudication process and any subsequent appeal is concluded.
Following the issue of an MTR, an independent OFT adjudicator considers representations from the applicant or licensee and then makes a decision whether to refuse or revoke. The Adjudicator gives regard to all information presented and where it is considered that the matters raised in the MTR are relevant to the applicant's or licensees fitness and the Adjudicator is not satisfied with their fitness to hold a licence, they will issue an adverse Determination to Revoke or Refuse (DTR). Alternatively, if the Adjudicator is satisfied with their fitness, a favourable determination can be issued. The trader has a right of appeal to the First Tier Tribunal if they disagree with a determination (see below). The trader retains their licence until the adjudication process and any subsequent appeal is concluded.
Decisions by the OFT, such as determinations to revoke or refuse a licence, or to impose requirements on a trader in terms which the trader has not already agreed, can be appealed to the First Tier Tribunal. For licensing decisions, the trader retains their licence until any is concluded. In requirements cases, the requirements apply immediately. For further information on the appeals process refer to the CCAT website
Please note that these proceedings are not the same as those of a court. Therefore a finding that a person has engaged in conduct which amounts to an offence or contravention of a statute does not mean that the person concerned has been convicted of that offence or been found by a court to have contravened a statute.
Details OFT action taken involving Group Licences. For example, where there are substantiated doubts about the fitness of an individual member of an organisation that holds a group licence, a 'Minded to Compulsorily Vary to Exclude a Group Member' notice will be issued. This is a formal notice advising the group licensee that the OFT is minded to vary the group licence to exclude a member.
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