Tweet
Press releases 2008
OFT takes away credit licence from debt management business
77/08 30 June 2008
The OFT has revoked the consumer credit licence of Matthew St John Crossley trading as the Debt Advisory Company. Through his websites http://www.thedebtadvisorycompany.co.uk and http://www.advisorsondebt.co.uk, Mr Crossley advertised 'free independent and impartial debt advice' to consumers with serious debt problems. These web-sites have been closed down.
He is understood to have advised consumers that re-mortgaging would be the best way to solve their debt problems. The consumers then released up to £30,000 equity in their homes and sent this to Mr Crossley so that he could repay creditors on their behalf.
The OFT found that he had:
Mr Crossley previously operated across the UK and although his exact current whereabouts are unknown, the OFT has received information suggesting that he may now be living abroad. If he was to continue to offer debt management services to UK consumers he would be committing a criminal offence. He is understood to have previously gone by the names of Matthew Crossley, and Matthew Prevett.
Ray Watson, OFT Director for Consumer Credit, said:
'This is one of the most serious cases involving debt management services we have encountered. We have evidence that consumers parted with tens of thousands of pounds and suffered increased financial hardship as a result of Mr St John Crossley's activities.
'Following their dealings with Mr St John Crossley one consumer was forced to sell his home, another was bankrupted and another found himself facing bankruptcy and the loss of his home. 'If consumers with debt problems need help in resolving their financial problems, they can obtain free advice from a range of charities and organisations. Under no circumstances should they seek such advice from Mr St John Crossley.'
NOTES
1. The OFT's Debt Management 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. A key principle of the Guidance is the requirement to act in the best interests of the consumer. The Guidance also states that advertisements and other promotional material must be accurate and clear and must not mislead, either expressly or by implication or omission. The spirit as much as the letter of the Guidance would apply to businesses where their activities relate to advising and/or otherwise assisting consumers with their debts.
2. The Consumer Credit Act 1974 (the Act) requires debt management companies to be licensed by the OFT. The OFT can refuse a licence if it decides that a trader is not fit to hold one. An OFT decision to revoke a licence can be appealed within 28 days of the date of the determination. The period in this instance has now passed and no appeal was made.
3. The OFT published guidance for debt management companies in December 2001. It applies to all those providing financial management services including IVAs, personal bankruptcy and commercial credit repair.
4. The Consumer Credit Act 1974 makes it a criminal offence to engage in regulated consumer credit activities without a licence. This offence is punishable by the imposition of fines, imprisonment, or both.
5. Consumers who may be seeking debt management advice:
OFT takes away credit licence from debt management business
77/08 30 June 2008
The OFT has revoked the consumer credit licence of Matthew St John Crossley trading as the Debt Advisory Company. Through his websites http://www.thedebtadvisorycompany.co.uk and http://www.advisorsondebt.co.uk, Mr Crossley advertised 'free independent and impartial debt advice' to consumers with serious debt problems. These web-sites have been closed down.
He is understood to have advised consumers that re-mortgaging would be the best way to solve their debt problems. The consumers then released up to £30,000 equity in their homes and sent this to Mr Crossley so that he could repay creditors on their behalf.
The OFT found that he had:
- failed to return monies to consumers on request
- failed to make payments to any or all of the consumers' creditors
- charged large initial and ongoing fees that appeared to be disproportionate to the work carried out, and
- made misleading statements and gave misleading advice about the services he provided in order to induce potential clients to enter into a contract.
Mr Crossley previously operated across the UK and although his exact current whereabouts are unknown, the OFT has received information suggesting that he may now be living abroad. If he was to continue to offer debt management services to UK consumers he would be committing a criminal offence. He is understood to have previously gone by the names of Matthew Crossley, and Matthew Prevett.
Ray Watson, OFT Director for Consumer Credit, said:
'This is one of the most serious cases involving debt management services we have encountered. We have evidence that consumers parted with tens of thousands of pounds and suffered increased financial hardship as a result of Mr St John Crossley's activities.
'Following their dealings with Mr St John Crossley one consumer was forced to sell his home, another was bankrupted and another found himself facing bankruptcy and the loss of his home. 'If consumers with debt problems need help in resolving their financial problems, they can obtain free advice from a range of charities and organisations. Under no circumstances should they seek such advice from Mr St John Crossley.'
NOTES
1. The OFT's Debt Management 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. A key principle of the Guidance is the requirement to act in the best interests of the consumer. The Guidance also states that advertisements and other promotional material must be accurate and clear and must not mislead, either expressly or by implication or omission. The spirit as much as the letter of the Guidance would apply to businesses where their activities relate to advising and/or otherwise assisting consumers with their debts.
2. The Consumer Credit Act 1974 (the Act) requires debt management companies to be licensed by the OFT. The OFT can refuse a licence if it decides that a trader is not fit to hold one. An OFT decision to revoke a licence can be appealed within 28 days of the date of the determination. The period in this instance has now passed and no appeal was made.
3. The OFT published guidance for debt management companies in December 2001. It applies to all those providing financial management services including IVAs, personal bankruptcy and commercial credit repair.
4. The Consumer Credit Act 1974 makes it a criminal offence to engage in regulated consumer credit activities without a licence. This offence is punishable by the imposition of fines, imprisonment, or both.
5. Consumers who may be seeking debt management advice:
- can obtain free advice from Citizens Advice Bureaux, Advice UK, National Debtline and the Consumer Credit Counselling Service
- should consider all available options such as debt management plans, IVAs, or bankruptcy and select the one which is best suited to their own circumstances.
Comment