Newsroom

Consumer credit licence third quarter update

154/06    1 November 2006

The OFT has conducted 283 licensing actions in the third quarter of 2006 (July - September 2006).

The OFT refused 17 consumer credit licence applications and revoked three existing licences during this quarter. Another 163 applications were not pursued after further enquiries to the applicant. The OFT also published 23 minded to revoke or refuse notices, and issued 77 warning or advisory letters.

Under the Consumer Credit Act, 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 issues taken into account when revoking and refusing licences during this period included acts of physical violence, fraud, conspiracy to supply controlled drugs, handling stolen goods, and breaches of the Trade Descriptions Act and the Consumer Credit Act.

In considering fitness, the OFT takes into account a number of factors carried out 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, race or ethic/national origin.

So far this year 765 licensing actions have been conducted, 32 applications have been refused, six licenses revoked and 76 minded to refuse notices issued. The OFT has also issued 184 warning or advisory letters, and 467 applications were not proceeded with following further enquiries with applicants.

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 Section 34 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 press releases 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 Consumer Credit Licensing on 020 7211 8608.

6. Applications refused between 1 July and 30 September are as follows:
MYPC UK Ltd, House Fitting and Appliances- Computers, Preston Lancashire
Wade Industries Ltd, Financial - Ancillary Credit Business, Wigan Lancashire
Mr Colm Stephen Sloan, Motoring and Transport - Second Hand Cars, Newry County Down
Richard Simons, House Fitting and Appliances - Glazing Products, Dumfries
Derby Commercial Centre Ltd, Motoring and Transport - Second Hand Cars, Derby
Derek France, Motoring and Transport - Second Hand Cars, Stockport
Stephen Nielsen, Holiday and Entertainment, Newcastle upon Tyne
Total Supplies, House Fitting and Appliances- Home Maintenance, Newark Nottinghamshire
Gordon Potsworth, Motoring and Transport - Second Hand Cars, Carrickfergus County Antrim
County Garages Ltd, Motoring and Transport - Second Hand Cars, Aughton West Lancashire
Mr Nasib Rahman, Financial - Professional Services, Forest Gate London
Mr Stephen Mungroo, Financial- Ancillary Credit Business, Fareham Hampshire
Glo Studios Limited, Personal, Edinburgh
Robert Peter Rogers, Motoring and Transport - Second Hand Cars, Swindon Wiltshire
Richard Paul Henry Grice, Financial - Ancillary Credit Business, North East Lincolnshire
Booth Furniture Ltd, House Fittings and Appliances - Furniture, Belfast
Northern Ireland
Mr and Mrs Chadwick, Motoring and Transport - Second Hand Cars, Denbighshire

7. Licences revoked between 1 July and 30 September are as follows:
First Domestic Finance Limited, House Fitting and Appliances - Computers, Preston Lancashire
Tony Roberts, House Fitting and Appliances - Appliances, Liverpool
C.A.R.E.S (GB) Limited, Financial - Ancillary Credit Business, Stoke-on-Trent

8. Applicants who have appealed decision:
Derek France, Motoring and Transport - Second Hand Cars, Stockport
Gordon Potsworth, Motoring and Transport - Second Hand Cars, Carrickfergus County Antrim
Mr and Mrs Chadwick, Motoring and Transport - Second Hand Cars, Denbighshire

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