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UK Debt Relief Providers May Lose Credit License On The Spot

The Office of Fair Trading, (UK Equivalent of FTC) has announced they are considering adding a new power to their quiver of tools to deal with rouge debt relief companies.

This new proposal seems very risky to even good and compliant debt relief providers in the UK. Under this new proposal the OFT could suspend the required consumer credit license without notice, warning, or appeal.

While the current revocation process does permit exhaustive appeals, this new proposed power may be enforced prior to all appeals being exhausted.

On one hand it does give the OFT an immediate ability to stop behavior it feels harms consumers. According the Office of Fair Trading, the new super-power will only be used if there is evidence that the business has engaged in violence, fraud, or dishonesty, or is targeting vulnerable consumers with harmful practices. Yea, we all know how that works out sometimes.

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.”

While this new power is like a U.S. court issued Temporary Restraining Order, what is different here is that the license can be pulled by a regulatory agency.

The new power will enable the OFT to suspend all aspects of the business covered under the license that is, no partial suspension, with immediate effect or on a date specified in a notice, with the consequence that any consumer credit activity undertaken by the suspended licensee from that point on will be unlicensed, and therefore illegal and (if applicable to the type of activity) unenforceable, until the suspension is ended.

You can read the full consultation document here.

UK Debt Relief Providers May Lose Credit License On The Spot
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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