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The OFT closed on 31 March 2014 and this website is no longer being updated. The OFT's work and responsibilities have passed to a number of different bodies. Read more.

Credit enforcement action

The OFT is responsible for ensuring that only fit and competent firms can hold a consumer credit licence. Where we have evidence that a firm is unfit or incompetent, or it is not complying with its consumer protection obligations, we can investigate and, if appropriate, impose sanctions.

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Compliance activity

OFT writes to banks and building societies (4 November 2013)

Following recent failures by some banks to fully discharge their obligations under the Consumer Credit Act, the OFT has asked a number of banks and building societies to confirm that they have accurately and fully provided consumers with information regarding their loan agreements. 

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Pre-enforcement: sectoral interventions

As well as formal investigations, we also take targeted action to raise standards across sectors, tackle market-wide problems quickly and gather evidence for potential enforcement action. This includes working with firms and trade association to improve their procedures and practices alongside pre-enforcement action such as warning letters.

We are currently taking pre-enforcement action as part of the payday lending compliance review. Following the publication of our findings in March 2013, we wrote to every payday lender requiring them to take immediate steps to ensure that they are complying with the standards set out in the report. We also announced that we are writing to 50 leading payday firms setting out our specific concerns about their compliance with the law and guidance. We are giving each firm 12 weeks from receipt of our letter to demonstrate they are compliant or they risk formal enforcement action. The compliance review pages contain regular progress updates.

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Open investigations

Below is a summary of our open investigations into the behaviour and practices of consumer credit firms. Each case may involve a number of separate consumer credit licences. This includes all open investigations, including those where we have formally notified the firm that we are minded to impose a sanction.

Case type

Number

 Gateway* 160
 Own-initiative** Total 32
By licensable activity:  
 Debt collection    1
 Debt management  14
 Unsecured lending  13
 Secured lending     4
By firm type:  
 Debt collection agency/debt purchaser    1
 Debt management/debt adjustment firm  14
 Lead generator    6
 Payday lender    9
 Home collected credit    1
 Secured/bridging loans provider    3
 Log book loans    1
 Other    5


 

  


 



 


 

 

 

 

 

 

 

 

 

 

 

 

*Gateway cases are investigations into firms that have applied for a credit licence, or to renew or amend an existing licence, where the application process has thrown up evidence which suggests that the firm is potentially unfit. More information can be found on our gateway pages.

** Own-initiative cases are investigations into firms which our intelligence suggests are engaged in unfair practices or may be otherwise unfit to hold a licence. 


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Formal action: 'minded to' notices

If our investigation finds evidence which we believe indicates a serious problem, we issue the firm with a notice that we are minded to impose a sanction on them - this could be taking away their licence, refusing their application for a licence, varying or limiting the activities they are licensed to carry out, or imposing specific requirements on them. Firms can also offer requirements themselves, rather than have them imposed by the OFT. If a firm breaches a requirement we have already imposed we can fine them up to £50,000 per breach. If we believe that a firm poses a serious and immediate risk to consumers we can suspend its licence with immediate effect.

The table below shows all the cases where we are currently minded to impose requirements on an existing licenceholder or to revoke its licence.

Date of notice

Licensee

Licence No

Proposed action

13/09/12 Ansar Ali   631227 Licence Revoke
11/04/13  Roxburghe UK Ltd    533468 Refuse to Renew
11/04/13 HFO Services Ltd    555914 Refuse to Renew
11/04/13 HFO Capital Ltd   614989 Refuse to Renew


 

            

 

 

 

 

 


You can find details of our actions to refuse applications for a new licence or to renew an existing licence on the gateway pages. Full details of all firms that hold a licence and any formal action taken against them can be found on the Public Register.

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Formal action: determinations

Once we have issued a 'minded to' notice, the firm has the opportunity to make representations to an independent adjudicator who will make a final decision. If the adjudicator upholds our case, we will issue a final decision, known as a 'determination'. Recent determinations include:

'Determinations in cases where the OFT was minded to revoke a licence since May 2011' shows all the cases where we have made a determination in cases where we were minded to revoke a licence in the last two years. Details of determinations in relation to applications for a licence or to renew or vary an existing licence can be found on the gateway pages.

'Credit Enforcement Activity - Requirements' shows all the cases where we have imposed requirements on a firm's licence in the last two years and links to the Requirements Notice and Press Notice which explain what the requirements are.

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Formal action: cases not contested 

Some cases go no further than the 'minded to' stage because the firm in question withdraws its application for a licence or surrenders the licence without challenging the 'minded to' notice. 'Minded to' notices not contested since May 2011' shows revocation and requirements cases in the last two years where this occurred.

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Suspending a consumer credit licence

An amendment to the Consumer Credit Act 1974 came into effect on 19 February 2013 and gave the OFT the power to suspend a consumer credit licence where it appears urgently necessary to do so for the protection of consumers.

  • Licence of Jonathan Edward Rochford remains suspended (17 January 2014)

    Following a case review, the consumer credit licence of Jonathan Edward Rochford, a Shropshire-based motor dealer trading as Phoenix Car Centre, remains suspended. The OFT announced the suspension on 18 December 2013, and the decision means that it continues to be a criminal offence for him, or any other person, for example an employee or agent, to engage in any consumer credit, consumer hire and credit broking activity using his licence. See press release: OFT suspends credit licence of Shropshire-based motor dealer for more information.
  • Licence of Worcestershire-based car dealer remains suspended (13 August 2013)

    Following a case review, the consumer credit licence of Worcestershire-based car dealer, Andrew James, remains suspended.  The OFT announced the suspension on 23 July 2013, and the decision means that it continues to be a criminal offence for him, or any other person, for example an employee or agent, to engage in any credit broking activity using his licence. See press release: OFT suspends licence of Worcestershire-base motor dealer for more information.
  • Donegal finance surrenders its licence

    Staffordshire-based Donegal Finance Limited (DFL) surrendered its consumer credit licence on 20 July following OFT action. DFL's licence was the first to be suspended (17 June), after a new power gave the OFT the power to suspend a licence where it appears urgently necessary to do so for the protection of consumers. The licence was suspended in this case because, among other reasons, DFL failed to disclose relevant information on its licence application. See press notice OFT uses power to suspend a credit licence for the first time (17 June 2013) when the suspension was announced.

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Appeals  

Firms can appeal against our determinations to the First Tier Tribunal. In 2011-12, 21 appeals were made against OFT determinations, including both gateway and own-initiative enforcement cases, and nine were brought forward from earlier years. Fifteen appeals were dismissed, struck out or withdrawn. No appeals were upheld. Fifteen appeals were still pending at 31 March. The table below provides a list of all the appeals made against OFT determinations in the last two years.


Recent appeal decisions include:


  • OFT half million fine for payday lender upheld (26 November 2013)

    An appeal by former online payday lender, MCO Capital Limited (MCO), against the OFT decision to fine them £544,505 has been dismissed by the First-tier Tribunal in a unanimous decision.  The OFT imposed the penalty in August 2012 for breaching the Money Laundering Regulations 2007, including failures to adequately verify the identities of loan applicants.  MCO has until 18 December to apply for permission to appeal. David Fisher, OFT Senior Director, Consumer Credit, said: 'Businesses that lend money to consumers must have adequate anti-money laundering procedures in place.  MCO failed to do this and was targeted by fraudsters using stolen identities of thousands of innocent consumers.'
     
  • Debt management firm, Welcome Solutions, loses its licence (18 October 2013)

    Welcome Solutions Limited (WSL), a Lancashire-based debt management company, has had its consumer credit licence revoked after it withdrew its appeal against an OFT decision to refuse to renew its licence. The OFT found that WSL, which traded as 'debtsorters.co.uk', had engaged in unfair or improper business practices, including:

    - falsely claiming or implying that its debt advice was provided on a free and impartial basis
    - publishing misleading or false customer testimonials.
  • First Step Finance (31 July 2013)

    Following discussions between the OFT and FSF, and upon undertakings being given by FSF's director, FSF is no longer pursuing its appeal against the revocation of its licence. However, subject to certain conditions, FSF has been authorised by the OFT to continue to carry on its existing debt adjusting and debt counselling business until 18 October 2013.

  • Wonga drops appeal against OFT requirement that it improve its debt collection practices (21 June 2013)

    Wonga.com Limited and some of its associates (Wonga) have dropped their appeal against an OFT decision to impose a requirement on them. The requirement was imposed on Wonga to ensure it improves aspects of its debt collection practices. The requirement states that Wonga must not, without appropriate justification:

    - allege that a customer has, or may have, engaged in criminal conduct or refer to the consequences of such conduct
    - state that a customer should not be in debt if the customer has a certain employment status or for any other reason.

    David Fisher, OFT Senior Director of Consumer Credit, said: 'We imposed this requirement to make sure Wonga does not use certain debt collection practices it previously used. We welcome Wonga's decision to withdraw its appeal.'

  • Five licences revoked after OFT decision upheld (12 May 2013)

    The licence of a family-run bridging lender based in Glasgow, Bridging Loans Limited, has been revoked by the OFT together with the licences of four associated lending companies, after the First-Tier Tribunal dismissed their appeals.

    The Tribunal agreed with the OFT that none of the five appellants is fit to hold a consumer credit licence. The Tribunal's decision means that Bridging Loans Limited, Commercial Loans Limited, Residential Loans Limited, Development Finance Limited and Deaconsbank Limited no longer hold a consumer credit licence.

    Bridging loans are usually used to secure a purchase of a property, while the buyer owns another property. The term of a bridging loan is normally around the time it takes to sell the other property or to secure a mortgage on the new property.

    David Fisher, Senior Director of Consumer Credit, said: 'These businesses did not meet the standards we require to hold a consumer credit licence.  We took this action to protect consumers.' Three OFT decisions upheld, including against businesses offering payday loans (24 April 2013)

  • The OFT has been successful in three appeal cases after the First Tier Tribunal ruled in favour of its decisions

    The wins mean that the OFT has revoked the licences of two cheque cashing businesses that offer payday loans - B2B International UK Limited ('B2B') and Loansdirect2u.com.Ltd - after it came to light that Neil Evans, an associate of both companies, had been convicted for offences involving violence and fraud. Both businesses are based on Middle Street, Brighton.

    David Fisher, OFT Senior Director of Consumer Credit, said: 'We will protect consumers against anyone who fails to disclose relevant information about criminal convictions on their licence applications.'

    The Tribunal also upheld the OFT' decision that Hatfield-based business, VK Money Lifestyle, should not be licensed to provide debt management services, including debt adjusting and debt counselling, because the applicant, Miss Kissias, lacks the knowledge, experience and skills to run a debt management business.


This page was last updated on 26/11/2013.




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