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Consumer credit licence quarterly update

295 licensing actions by OFT between July and September

PN 138/03     31 October 2003

The OFT carried out 295 licensing actions in the third quarter of 2003. 

Between 1 July and 30 September nine consumer credit licence applications were refused and five existing licences revoked. There were also 62 warning/advisory letters issued and 179 applications withdrawn following challenge. A further 39 minded to revoke or refuse or refuse to renew notices were issued plus one minded to grant in different terms. 

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.

Convictions under the Trade Descriptions Act, plus convictions for forgery, fraud and dishonesty, and complaints of violence and abusive behaviour, were some of the fitness issues taken into consideration in the refusal and revocation of licences this quarter.

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.

As with the last quarter, between July and September the motor trade received the most adverse adjudications with seven businesses having their applications refused or revoked. Other businesses whose licences were refused or revoked include: a credit broker and debt advisor; a mortgage broker; an unsecured loan provider; one finance for holiday homes provider; a computer services provider and a legal services provider and one kitchen, bathroom and bedroom supplier.

So far in 2003, 25 applications have been refused; ten licences revoked and 187 warning letters issued. Challenges to licence applications have also led to 645 applications been withdrawn.

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 (pdf 37 kb). The OFT has also produced sector specific guidance:

• download debt management guidance (pdf 52 kb)
• download secondhand cars markets guidance (pdf 268 kb)
• download debt collection guidance (pdf 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 refused between 1 July and 30 September are as follows:

Nathan Michael, Unsecured loans – Middlesex - 464460
Shailesh Kataria, Motor Dealer – Leicestershire – 527399
William Robert Parish, Motor Dealer – Kent – 520233
Willmakers of Distinction, Legal Services – Licolnshire – 512697
Elite Fleet Ltd, Motor Dealer - Staffordshire – 512216
Michael Oldham, Computer Services – Manchester – 528600
Friern Ltd, Motor Dealer – Essex – 529669
The Trade Centre Wales Ltd, Motor Dealer – Glamorgan – 513223
Kenneth Ellis (Refuse to renew), Kitchen, bathroom and bedroom suppler – Chesire – 419455.

7. Applications revoked between 1 July and 30 September are as follows:

Pinetree Car Sales Ltd, Motor Dealer – Glamorgan – 490131
Malcolm Watsford Wallace, Credit Broker and Debt Adviser – Berkshire – 159767
Dominic Andrew Bardsley, Mortgage Broker – Chesire – 390304
Caldon Ltd, Finance for holiday homes – Essex – 272133
Mark Thomas Bailey, Motor Dealer – Glamorgan – 257307

8. Applicants that have appealed decision:

William Robert Parish - 520233

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