One of the UK’s largest loan brokers has lost its operating licence after being found to have conducted ‘deceitful and oppressive’ business practices.
The Office of Fair Trading stripped the licences of Yes Loans and two of its sister companies, Blue Sky Personal Finance Limited and Money Worries Limited.
As a loan broker, Yes did not lend money directly but sought loans – including unsecured, short-term, guarantor and payday loans – from a limited number of companies to try and find consumers a deal. On its homepage it advertises its representative APR as 3,359% – that is an extra £33.59 on a £100 loan.
Fees charged without consumer consent
OFT evidence showed Yes Loans had used high pressure sales tactics to get consumers card details on the false premise that they were required for security checks and deducted brokerage fees without making it clear a fee was payable, and/or without the consumer’s consent.
Yes Loans had also failed to introduce some consumers to the product they originally sought, instead arranging short-term, high interest loans.
Other failings include neglecting to provide refunds in a timely manner and misleading customers into believing it was a loan provider instead of a credit broker.
OFT taking decisive action
Following the OFT’s investigation in 2009, Yes Loans made a number of changes to how it operated while associated companies also surrendered or withdrew their consumer credit licences or applications.
However, the OFT determined that the evidence of prolonged engagement in deceitful and oppressive business practices, and the continuing presence of some of the staff responsible for running the businesses, makes them unfit to hold a consumer credit licence.
David Fisher, director of consumer credit at the OFT, said: ‘We will take decisive action to tackle businesses that fail to treat people properly, especially the most vulnerable.
‘This action also makes it clear that belatedly changing business practices when facing the prospect of enforcement action by the OFT does not make a company fit to hold a credit licence.’
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