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OFT revokes licence of Stoke on Trent debt collection agency

167/06    28 November 2006

The OFT has revoked the consumer credit licence of a debt collection company based in Stoke on Trent for withholding money from its own clients that it had collected on their behalf.

C.A.R.E.S (GB) Ltd was expelled from the Credit Services Association (CSA) following a number of complaints from clients who had not received payments totaling over £20,000. Seven county court judgments were also entered against the company after its clients took action to recover the payments. The company was reported to the OFT by the CSA.

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 the business, as well as evidence of any unfair business practices including practices which contravene relevant OFT guidance.

Following the OFT investigation, the company did not make any representations to the OFT and has not appealed the decision.

Simon Priddis, Senior Director of Markets and Projects at the OFT, said:

'This decision sends a clear message that the OFT will take tough action against those in the debt collection industry who engage in unacceptable behaviour. We will continue to work with organisations like the CSA in order to protect consumers by ensuring that only those businesses which are fit to hold a licence are allowed to do so.'

NOTES

1. The Consumer Credit Act 1974 (the Act) 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. A failure to comply with OFT's debt collection guidance, issued in July 2003, would call into question a licencee's fitness.
 
3. It should be noted that proceedings by the OFT under the Act are not the same as those of a court and the adjudicator's findings under the Act 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 law 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. Adjudicators issue and determine licensing Notices under the Act. They do so on behalf of the OFT, but make individual and independent decisions on fitness based on the contentions in a Notice, the evidence attached to a Notice and the representations of those to whom the Notices are addressed. Representations may be made in writing and at an oral hearing.

5. 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 within 28 days of the date of the determination. The appeal period has now passed.

6. The Consumer Credit Public Register is maintained by the OFT. The Register documents details of traders that hold a licence and any action taken against them. It also includes details of traders that have applied for a licence. Enquiries can be made to Consumer Credit Licensing on 020 7211 8608.

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