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Consumer credit licence quarterly update

294 licensing actions by the OFT

PN 104/03     24 July 2003

The OFT carried out 294 licensing actions in the second quarter of 2003.

Between 1 April and 30 June seven licence applications were refused and one existing licence revoked. There were also 56 warning letters issued, 197 applications withdrawn following challenge and 33 minded to revoke or refuse notices issued.

Under the Consumer Credit Act 1974 businesses that are involved in consumer credit or hire must have a consumer credit licence. The OFT has a duty to protect the interests of consumers by monitoring the fitness of those holding or applying for licences.

Some of the fitness issues taken into consideration in the refusal and revocation of licences between 1 April and 30 June 2003 included convictions for assault, undeclared convictions, unlicensed trading, director disqualification, breaches of the mortgage code, falsifying documents.

In considering fitness the OFT can take into account a number of factors including:

• any offence or conviction connected with the business or anyone involved in running the business
• failure to comply with the provisions of the Consumer Credit Act or other consumer protection legislation
• consumer complaints
• evidence of unfair business practices
• evidence of discrimination on grounds of sex, colour, race or ethic/national origin.

In line with the annual trend the motor trade accounted for most licensing action in the second quarter of 2003 with four motor dealers, one commercial vehicle dealer and one car lease company having their licence revoked or application refused. The quarter also saw one health club and one mortgage consultant have their licence applications refused.

So far in 2003, 16 applications have been refused and 5 licences revoked. 125 warning letters have been issued and 466 applications have been withdrawn following challenge. 

NOTES

1. The Consumer Credit Act 1974 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 OFT.

2. The OFT can refuse or revoke a licence if it decides that a trader is not fit to hold one.  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 letting the trader know that the OFT is minded to refuse to grant a licence or to revoke an existing licence.  It sets out the reasons for the proposed action with supporting evidence.  Under s34 of the Act, the trader has the right to respond to the Notice by making written and/or oral representations to an Adjudicating Officer, who acts for and on behalf of the OFT. 

3. Guidance for holders of consumer credit licences is available to download in pdf format (37 kb) The OFT has also produced sector specific guidance:

• download debt management guidance (pdf file 52 kb)
• download secondhand cars markets guidance (pdf ile 268 kb)
• download debt collection guidance (pdf file 337 kb).

These detail examples of behaviour that would lead to a licensee's fitness being called into question. See PNs 48/01, 82/02 and 97/03.

4. An adverse determination (a refusal to grant a licence or the revocation of an existing licence) can be appealed to the Secretary of State for Trade and Industry.

5. The Consumer Credit Public Register is maintained by the OFT. The register documents traders that hold a licence and any action taken against them. It also details traders that have applied for a licence. Enquiries can be made to the Consumer Credit Licensing Bureau on 020 7211 8608.

6. Applications that were refused between 1 April and 30 June 2003 are as follows:
Glenn Hunt, Trax Fitness, health & fitness club – Berkshire – 523010
Lucy Ann Goodyer, Woodford Motor Company, motor dealer – Cheshire – 508221
Karl Anthony Fisher, FTS Car Sales, motor dealer – Staffordshire – 517832
Terry Thomas Peffer, mortgage consultant – West Sussex – 473096
Trevor Joseph Gibson, TG Gibson Commercials, commercial vehicle dealer – Armagh – 525551
Chadwick & Smedley, Celtic Cars, car dealer – Denbighshire – 390479

7. Applications to renew licences between 1 April and 30 June 2003 are as follows:
Lynda Janet Murray, Eglinton Autos, motor dealer – Ayrshire – 425138

8. Licences revoked between 1 April and 30 June 2003 are as follows:
J&G Corporation Ltd, car leasing firm – Bow, London – 515043

9. Full details of applicants that have appealed are as follows:
Lynda Janet Murray – 425138

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