The Office of Fair Trading has announced that 35 debt management firms have surrendered their consumer credit licences, and at least 15 are facing licensing action as a result of the OFT’s recent compliance review.
The announcement follows an OFT warning to 129 firms in September, after its review of the debt management sector found widespread problems with compliance. Since this warning was issued:
- 35 firms have surrendered their licences
- eight firms have been informed that the OFT intends to revoke their licences
- a further seven companies who did not respond are currently being investigated, and
- 79 firms have submitted evidence, which the OFT will now review
As well as taking enforcement action, the OFT is updating its debt management guidance to take account of new and emerging unfair business practices identified in the course of its review.
OFT determined to improve debt management standards
Ray Watson, Director of the OFT’s Consumer Credit Group, said: ‘We are determined to improve standards in this sector, as the failings identified by our review are unacceptable. Companies providing debt management services should be in no doubt that we will act against bad practice and ensure consumers are protected.’
Martyn Saville, Which? debt and credit expert, added: ‘The OFT’s review, as well as previous Which? undercover research, revealed widespread poor practice in the debt management sector. It’s good news for struggling consumers that the OFT is weeding out dodgy companies from the sector.
‘However, it’s also worth repeating once again that there are better, free advice services elsewhere, for example from the Consumer Credit Counselling Service (CCCS), National Debtline and PayPlan. If you want independent expert advice without a fee, ditch the commercial DMCs altogether,’
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