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1st Credit told to improve debt collection practises by OFT

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  • 1st Credit told to improve debt collection practises by OFT

    OFT imposes requirements on 1st Credit over debt collection practices

    20/09 25 February 2009
    The OFT has taken action against 1st Credit Ltd requiring the company to improve its debt collection practices.
    The OFT has imposed 'requirements' on 1st Credit using consumer credit powers, after an investigation found that some of its business processes and procedures failed to meet satisfactory standards. As a result, 1st Credit Ltd and its associated companies must:
    • refrain from issuing statutory demands warning of bankruptcy where it is unlikely that proceedings will be initiated
    • not discuss legal action with consumers unless it is likely that such action will be taken
    • ensure that sensitive cases involving vulnerable individuals, for example those with mental health or medical problems, are dealt with appropriately, and
    • ensure that all matters of concern raised with them by the free advice sector and other third parties are dealt with appropriately.

    1st Credit must also report back to the OFT every six months providing statistics regarding the number of enforcement actions it has taken against debtors.
    Failure to comply with the requirements could lead to a fine of up to £50,000 for occurance and/or possible revocation of 1st Credit's consumer credit licence.
    In 2008, following receipt of an application to vary an associated company's licence, the OFT carried out an in-depth investigation into the business practices and procedures employed by companies operating under the 1st Credit banner. In assessing the companies' competence to carry out consumer credit activities, the OFT conducted on-site visits and reviewed complaints received about 1st Credit Ltd's debt collection practices via consumers, Citizens Advice, CCCS and Consumer Direct.
    The OFT raised concerns about its dissatisfaction with 1st Credit's behaviour and confirmed that it was looking to impose requirements to improve some of the company's business practices. 1st Credit acknowledged the problems and, as allowed under the Consumer Credit Act, proposed necessary changes to address the OFT's concerns.

    Ray Watson, OFT Director for Consumer Credit, said:
    'The OFT welcomes the constructive approach that 1st Credit has taken in responding to the OFT's concerns about its activities.
    'Debt collection firms have a clear legal obligation to deal fairly and proportionately with consumers. This is more important than ever given the current economic climate, when people may already be suffering as a consequence of debt problems. We will continue to use our licensing powers to take firm action to protect consumers where debt collectors engage in oppressive behaviour or practices that fail to comply with our guidance.'
    NOTES
    1. The Consumer Credit Act 1974 (the Act) requires debt collectors, businesses that offer goods or services on credit and/or are involved in activities relating to credit or hire, to be licensed by the OFT.
    2. In 2003 the OFT issued the Debt Collection Guidance which sets out minimum standards for those intending to collect debts. Failure to comply with the Debt Collection Guidance may call into question the fitness of a business to hold a consumer credit licence.
    3. Following implementation of the OFT's new powers under the Consumer Credit Act 2006 on 6 April 2008, where the OFT is dissatisfied with any matter in connection with a business, a proposal to carry on a business or any other conduct by a licensee, associate or former associate, the OFT may impose 'requirements' on the licensed business. Requirements may require a business to do or not to do (or to cease doing) anything specified for the purposes connected with addressing the OFT's dissatisfaction, or securing that matters of the same or a similar kind do not arise.
    4. If a single requirement is not complied with, the business concerned could be subject to a financial penalty of up to £50,000. The OFT may also refuse or revoke a licence if it decides that a trader is not fit to hold one.
    5. Decisions to refuse or revoke a consumer credit licence or to impose a requirement or financial penalty are made by an adjudicating officer for and on behalf of the OFT. Before a decision is made, the adjudicating officer issues a notice to the trader. The trader is then given the opportunity to make representations to the adjudicating officer. In the event that the determination is adverse, the trader has the right of appeal against the determination to the Consumer Credit Appeals Tribunal.
    6. Alternatively a business may make a proposal to address the OFT's dissatisfaction pursuant to section 33D(4) of the Act. In these circumstances the OFT is not required to issue a notice that it is minded to impose requirements if the proposed determination is in the same terms as the proposal made by the business. This was the process followed by 1st Credit.
    7. The Consumer Credit Act 2006 requires the OFT to take into account 'credit competence' when assessing applications. Businesses operating in a high risk part of the market such as the debt collection sector are now subject to greater scrutiny at the licence application stage and greater monitoring throughout the life of the licence.
    8. The fact that requirements have been imposed on 1st Credit Ltd appears on the consumer credit register. Download the requirements imposed (pdf 2.44 Mb). We will monitor 1st Credit Ltd's compliance with the requirements. Any complaints about non-compliance should be sent to:
    #staysafestayhome

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

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  • #2
    Re: 1sr Credit told to improve debt collection practises by OFT

    About fecking time !!!
    Especially the SD issue.

    Sorry I had to post this OTR as I know they have numerous friends there and monitor that site closely
    Last edited by Curlyben; 25th February 2009, 15:24:PM.

    Comment


    • #3
      Re: 1sr Credit told to improve debt collection practises by OFT

      Thought you would like that
      #staysafestayhome

      Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

      Received a Court Claim? Read >>>>> First Steps

      Comment


      • #4
        Re: 1st Credit told to improve debt collection practises by OFT

        I remember that a cabal of debt charities, the OFT and trading standards were getting severly hacked off over this a year ago. They were collecting evidence to show stat demands were being used incorrectly. It is great to see the OFT doing something and using its new powers, I even think I might write to them and thank them.

        Comment


        • #5
          Re: 1st Credit told to improve debt collection practises by OFT

          The OFT Requirements make for some interesting reading.
          Basically this also includes ANY other companies instructed by 1st, so that's Connaught and LCS "solicitors" as well.

          Shame, couldn't't happen to nicer people

          Comment


          • #6
            Re: 1st Credit told to improve debt collection practises by OFT

            This goes to show that if enough complaints are received by the OFT about various DCA's bad practices they will act to prevent them.

            Most of the issues raised against 1st Credit are indeed breaches of the OFT664 Debt Collection Guidleines.

            Do you have a genuine complaint against a DCA or Collections Department?
            Are they acting against OFT Debt Collection Guidelines?
            If you do then read more HERE
            Any opinions I give are my own. Any advice I give is without liability. If you are unsure, please seek qualified legal advice.

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            • #7
              Re: 1st Credit told to improve debt collection practises by OFT

              Good morning all

              Just had to add my two penn'orth - 'About time too, these parasites ALL need a lesson, I am delighted that some action is being taken at last, let us hope that it will, in the fullness of time, close down those who fail to comply!!'

              Best wishes to all

              Dougal

              Comment

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