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OFT refuses credit licence to Lancashire debt management firm

82/09    9 July 2009

The OFT has refused an application for a consumer credit licence from a debt management business based in Ormskirk, Lancashire.

A & H Debt Dissolvers Ltd (A & H) had committed an offence by offering debt management services whilst unlicensed. As well as engaging in unlicensed trading, the OFT found A & H had failed to demonstrate the competence necessary to carry on a debt management business and failed to comply with the OFT's debt management guidance, including by making a number of misleading website statements and by not being transparent regarding fees.

A & H had misleadingly advertised 'free help and advice' and 'expert advice' to consumers with serious debt problems through its own website www.ahdebtdissolvers.co.uk, and the website of an associated company, www.crunchyourcredit.co.uk. These websites have now been closed down.

An OFT adjudicator decided that the company was not fit or competent to hold a consumer credit licence and therefore the application was refused.

Ray Watson, OFT Director of Consumer Credit, said:

'Where businesses show themselves to be unwilling to comply with their legal obligations and to lack competence to engage in credit activities we will take all necessary action to ensure consumers are protected. Unlicensed trading is not acceptable. It poses real risks of harm to consumers and denies them effective protection under the law.'

NOTES

1. The Consumer Credit Act 1974 makes it a criminal offence under section 39(1) to engage in regulated consumer credit activities without a licence. This offence is punishable by the imposition of fines, imprisonment, or both.

2. The OFT can refuse or revoke a licence if it decides that a trader is not fit to hold one. Adjudicators issue and determine licensing notices under the Consumer Credit Act. They do so on behalf of the OFT, but make individual and independent decisions on fitness based upon 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.

3. An adverse determination (a refusal to grant a licence or the revocation of an existing licence) can be appealed to the Consumer Credit Appeals Tribunal. In this case, the period in which an appeal could be made has now passed.

4. Traders applying for high risk debt management licence categories must also demonstrate credit competence and have procedures in place to ensure compliance with the OFT's debt management guidance. This guidance sets out minimum standards of behaviour expected of licence holders engaging in the provision of debt management services, which seek to re-schedule customers' repayment of debt and charge for doing so. Key principles include transparency around the way that they promote their debt management activities and about the cost and nature of the service they provide.

5. The determination to refuse application number 617753 was published on 24 April 2009. The licence applicant was A&H Debt Dissolvers Ltd, Eden House, 34 Heskin Lane, Ormskirk, Lancashire, L39 1LR.

6. For advice on dealing with debt, see the Directgov website or visit your local Citizens Advice bureau.  

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