Newsroom

Consumer credit licence quarterly update

176/07    17 December 2007

The OFT has conducted 61 licensing actions in the third quarter of 2007 (July - September 2007). The OFT refused seven consumer credit licence applications and revoked four existing licences. The OFT also published 12 minded to revoke or refuse notices.

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 fitness issues taken into account include acts of fraud, theft, dishonesty, physical violence, handling of stolen goods, actual bodily harm, breaching a community punishment order, obtaining property by deception, offences relating to the Trade Descriptions Act, Trade Marks Act, Copyright Act and Protection of Animals Act and breaches of the Consumer Credit Act and other consumer protection legislation.

During the quarter we also issued 38 warning or advisory letters. For example, we advised or warned five financial management businesses about the misleading nature of their advertising of Individual Voluntary Arrangements (IVAs). The adverts failed to warn consumers about the potential disadvantages of an IVA such as the effect on an individual's credit rating, the potential implications if the debtor is a homeowner and the fact that any failure of an IVA can lead to bankruptcy. The OFT also warned a licensed debt collection company about a number of issues relating to breaches of our debt collection guidance. These included pressurising debtors to extend their borrowing or pay in unreasonably large instalments, refusing to deal with and/or bypassing third parties and contacting debtors at unreasonable times and intervals.

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, colour, race or ethic/national origin.

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.

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:

Thoros Georgiou, Motor Dealer, Oakwood, London - 414136
Jamie Folkard, Furniture Retailer, Waltham Forest, London - 598094
Gurcharan Singh, Estate Agent, Handsworth, Birmingham- 580759
David Thomas, Accountant, Penpedairheol, Hengoed, 592523
Saints Estates & Mortgages, Estate Agent, Birmingham - 594893
Andreas Georgiou, Motor Dealer, Oakwood, London - 587720
Oakwood Motor Company (London) Ltd, Motor Dealer, Oakwood, London - 566777

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

Gerard John Joseph Mulligan, Motor Dealer, Lisburn, Co Antrim - 533094
James Pugh, Cash Loans/Hampers, Blackpool, Lancashire - 561101
Michael Anthony Sweeney, Double Glazing, Blackburn, Lancashire - 577403

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