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OFT refuses credit licence to Liverpool motor dealer

PN 123/03    24 September 2003

Liverpool-based motor dealer Elite Fleet Ltd has been refused a consumer credit licence by the OFT.

An adjudicator found that the company had contravened a provision of the Consumer Credit Act 1974 in providing false information to the OFT on its credit application form by not naming Michael Scragg as a person who could direct or influence the way the business is run. 

The adjudicator also found that Michael Scragg had used Elite Fleet's name to apply for a licence for his own use. Michael Scragg has been convicted of various offences including theft, obtaining property by deception and conspiracy to defraud.

The adjudicator decided that he was not satisfied that the applicant was fit to hold a consumer credit licence.

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 and applying for licences.

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 ethnic/national origin.

Christine Wade, OFT Director of Consumer Regulation Enforcement said: 'It is a serious offence to give false or misleading information to the OFT when applying for a consumer credit licence. The OFT will not hesitate to refuse an application for a credit licence where evidence exists that a trader is unfit.'

NOTES

1. The Consumer Credit Act 1974 requires most 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.

3. It should be noted that proceedings under the Act are not the same as those of a court and the adjudicator's findings are not the same as convictions by a court. Therefore, where the adjudicator finds that an offence has been committed or that a provision of the statute has been contravened, it does not mean that the person concerned has been convicted under court proceedings of that offence or of that contravention.

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. The determination to refuse licence application number 512216 was issued on 11 September 2003. The applicant was Elite Fleet Ltd. The company's main place of business was 303-314 The Cotton Exchange, Old Hall Street, Liverpool L3 9LQ.

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