OFT refuses to licence debt advice firm

90/10 12 August 2010

The OFT has refused to grant a consumer credit licence to a sole trader, Stewart Richard Wilson, because of his failure to demonstrate he had the required competencies to run a debt advice business.

The OFT found that Mr Wilson had no formal training and did not possess the skills, knowledge and experience required to operate a debt advice business. He was also unable to demonstrate that he had put in place the practices and procedures necessary to provide these services in accordance with the minimum standards set out in the OFT's Debt Management Guidance, and his processes for handling consumer complaints failed to comply with the Financial Ombudsman Service's rules.

Nigel Cates, OFT Deputy Director of Consumer Credit, said:

'Traders applying for a licence to undertake high risk debt advice activities must be able to show that they are fit to do so, as it is the OFT's duty to protect vulnerable consumers from receiving poor debt advice. Businesses that cannot demonstrate the necessary skills, knowledge and experience will not be granted a credit licence.'

NOTES

The Consumer Credit Act 1974 (the Act) requires most businesses offering credit, lending money or involved in activities relating to credit or hire to be licensed by the OFT. The OFT can refuse or revoke a licence if it decides a trader is not fit to hold one.
Under the Act, Adjudicators issue and determine licensing notices (such as the decision to refuse a licence) under the Act. They do so on behalf of the OFT, but make individual and independent decisions on fitness based on the contentions in a notice, the evidence attached to a notice and representations received from the applicant(s).
An adverse determination (a refusal to grant a licence or the revocation of an existing licence) can be appealed to the First Tier Tribunal (Consumer Credit). In this case, the period in which an appeal could be made has now passed.
The refusal of Stewart Richard Wilson's licence appears on the Consumer Credit Public Register which is available at: www2.crw.gov.uk/pr/Default.aspx.
Traders applying for high risk debt management categories must ensure compliance with various legislation and guidance, including the OFT's Debt Management Guidance, which sets out minimum standards of behaviour expected of licence holders engaging in this sector. Download a copy of the OFT's Management Guidance from the Debt management guidance publication page.
Consumers seeking advice on dealing with debt can access information from Directgov website.

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