News In Focus
OFT consults on credit licence sanction
23 October 2012
The Office of Fair Trading is consulting on how it proposes to use a new power to suspend consumer credit licences in certain circumstances.
Expected to come into effect in spring of 2013, through an amendment to the Financial Services Bill now before Parliament, the power will allow the OFT to act quickly to put a stop to the licensable activities of businesses that otherwise would be able to operate until the end of an often lengthy appeals process. The power will be available only where there is an urgent need to protect consumers from harm, but will be able to be exercised with immediate effect or from a specified date.
Suspension is contemplated for the most serious cases, which include those where there is evidence of physical harm to consumers, or the threat of such harm, or evidence that the business has engaged in violence, fraud, or dishonesty, or is targeting vulnerable consumers with harmful practices.
Other factors to be taken into account are likely to include a failure to address concerns raised by the OFT or partner organisations, such as local authority trading standards services.
David Fisher, OFT Director of Credit, said: "This is an important new power that will allow us to deal quickly with businesses posing an immediate and serious risk to consumers.
"Following consultation with interested parties, we expect to use the power in serious cases where it is essential we prevent a business operating to protect people."
Click here to access the consultation, which runs until 15 January 2013. Final guidance will be published in February 2013.