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OFT revokes life insurance provider's consumer credit licence

PN 168/03     12 December 2003

A life insurance provider from Birmingham has had his consumer credit licence revoked by the OFT.  

The licence was revoked on the basis that the licensee, Mr Karim Lalani, and an associate had engaged in unfair business practices when acting as officers for a company. These practices include: continuing to trade when the company was taking unwarranted risks with creditors' money; misuse of the company bank account; failure to make VAT returns and failure to prepare and submit adequate accounting records.

An adjudicator decided that the licensee was no longer fit to provide credit to consumers and accordingly the licence was revoked.

Under the Consumer Credit Act 1974, businesses that offer consumer credit or hire, or who introduce customers to businesses offering credit facilities, must have a consumer credit licence. The OFT has a duty to protect the interests of consumers by monitoring the fitness of applicants and licence holders.

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

• any offence or conviction of violence or dishonesty carried out by 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 practice 
• evidence of discrimination on grounds of sex, colour, race or ethnic/national origin.

Director for Consumer Credit and Estate Agency, Ray Hall said:

'The licensee engaged in a number of unfair and improper business practices making him unfit to provide credit to consumers.'

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 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 revoke licence number 250442 was published on 3 December 2003. The licensee was Karim Lalani. The main place of business is Edgbaston, Birmingham.

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