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Consumer credit licence quarterly update

411 licensing actions conducted by OFT

178/04    29 October 2004

The OFT has conducted 411 licensing actions in the third quarter of 2004.

The OFT refused 12 consumer credit licence applications and revoked three existing licences between 1 July and 30 September. Financial service providers and the motor trade had the most adverse adjudications: financial service providers had eight refusals or revocations; the motor trade had four licence refusals.

A further 269 applications were not proceeded with after further enquiries to the applicant.  There were 43 minded to revoke or refuse notices issued in the period in addition to 84 warning/advisory letters.

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 account when revoking and refusing licences during this period included convictions for supplying controlled drugs, blackmail, conspiracy to defraud, false accounting, tax evasion and perverting the course of justice.

In considering fitness, the OFT takes into account a number of factors carried on by the business or anyone involved in running the business including:

• any offence or conviction of violence or dishonesty
• 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.
  

So far in 2004, 956 licensing actions have been conducted: 27 applications have been refused; 12 licences revoked, 99 minded to revoke or refuse notices issued, one consumer credit licence application granted in different terms, 200 warning/advisory letters issued, and 617 applications were not preceded with following further enquiries.

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 from the OFT website. The OFT has also produced sector specific guidance on debt management, second hand cars markets, and debt collection.

These detail examples of behaviour that would lead to a licensee's fitness being called into question. See PNs 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:

Westgate Motor Co Ltd, motor dealer – Smethwick – 543672
Michael Allen, motor dealer – Hull – 534750
Mark Anthony Harrington, motor dealer – Leamington Spa - 544824
John Doherty, loan provider – Bishop Stortford – 540170
Andrew William Austin, sales and marketing – Newcastle-upon-Tyne – 538260
Mortgages and Loans Ltd, mortgage brokers and financial advisers – Preston - 520291
Nazma Ullah, credit broker – Southend-on-Sea – 523424
Jeffrey Olawoyin Olagundoye, mortgage broker and financial adviser – Dagenham – 549418
Paragon Plastics UK Ltd, double glazing – Morecombe – 542564
Ralph Earnest Blore, credit broker – Wolverhampton - 542394
Colin Andrew Boundy, motor dealer – Plymouth – 544459
Phoenix Direct Finance Ltd, personal Loans – Stockport - 541791

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

The Real Exchequer Ltd, mortgage brokers and financial advisers – Preston – 475705
N & N Travel Club, travel/holiday club – Uckfield, E.Sussex – 496148
Michael Anthony Morris, finance broker – Stockport - 410845

8. Applicants who have appealed decision:

 Mark Anthony Harrington, motor dealer – Leamington Spa - 544824
Mortgages and Loans Ltd, mortgage broker and financial advisers – Preston – 520291

9. Licensees who have appealed decision:

The Real Exchequer Ltd, mortgage broker and financial advisers – Preston – 475705
Michael Anthony Morris, finance broker – Stockport - 410845

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