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OFT imposes requirements on Yes Loans over credit brokerage services
85/09 16 July 2009
The OFT has imposed requirements on the consumer credit licence of Yes Loans Limited.
Download Yes Loans Limited requirements (pdf 981kb).
As a result of an OFT investigation into the business practices of Yes Loans, the company will amend its terms and conditions, and ensure that customers receive a statutory refund of brokerage fees within 30 days of cancelling. In addition, Yes Loans is required to stipulate clearly on its website and all future literature that it offers 'credit brokerage' services. As a result of these changes, the licence renewal application submitted by Yes Loans has been granted.
A breach of a requirement can lead to a fine of up to £50,000.
Ray Watson, OFT Director of Credit, said:
'These requirements have been imposed to address the concerns raised by an OFT investigation into the business practices of Yes Loans. Yes Loans has co-operated with the OFT, and we shall continue to monitor the situation and take further action if necessary.
'Many businesses charge an up-front fee for brokering loans for consumers, and customers should be aware that if they use a broker but do not accept the credit offered, no matter what the reason, they are entitled to a refund less £5. The OFT will continue to take action against companies who fail to do so.'
NOTES
1. The OFT has a statutory duty under the Consumer Credit Act to administer the consumer credit licensing regime, and must be satisfied that a licensee is fit to hold a consumer credit licence.
2. The Consumer Credit Act 1974, as amended, provides a wide range of protection for consumers accessing credit. All traders engaging in credit activities such as lending or brokering of loans must be licensed under the Act. All consumer credit licence holders must satisfy the OFT that they are fit to engage in those activities for which a licence is required and are subject to ongoing monitoring during the lifetime of the licence.
3. Where the OFT has evidence of any practices which appear to be unfair, misleading, oppressive, or improper, whether lawful or not, it has a range of enforcement powers including taking steps to refuse, revoke or suspend a licence; to impose requirements for a business to change its behaviour; or seeking undertakings or an Enforcement Order under the Enterprise Act 2002.
4. 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.
5. A breach of a requirement can lead to a fine of up to £50,000 and/or be grounds for revocation of a consumer credit licence.
6. Under section 155 of the Consumer Credit Act 1974, a consumer is entitled to a refund (less £5) of the fee paid to a credit broker if for any reason the consumer does not enter into a relevant agreement within six months of an introduction to a source of credit or hire.
7. Under the Financial Services (Distance Marketing) Regulations 2004, a consumer has the right to cancel their contract within 14 days and receive a refund of fees paid. For more information about these regulations go to the Consumer Direct website.
85/09 16 July 2009
The OFT has imposed requirements on the consumer credit licence of Yes Loans Limited.
Download Yes Loans Limited requirements (pdf 981kb).
As a result of an OFT investigation into the business practices of Yes Loans, the company will amend its terms and conditions, and ensure that customers receive a statutory refund of brokerage fees within 30 days of cancelling. In addition, Yes Loans is required to stipulate clearly on its website and all future literature that it offers 'credit brokerage' services. As a result of these changes, the licence renewal application submitted by Yes Loans has been granted.
A breach of a requirement can lead to a fine of up to £50,000.
Ray Watson, OFT Director of Credit, said:
'These requirements have been imposed to address the concerns raised by an OFT investigation into the business practices of Yes Loans. Yes Loans has co-operated with the OFT, and we shall continue to monitor the situation and take further action if necessary.
'Many businesses charge an up-front fee for brokering loans for consumers, and customers should be aware that if they use a broker but do not accept the credit offered, no matter what the reason, they are entitled to a refund less £5. The OFT will continue to take action against companies who fail to do so.'
NOTES
1. The OFT has a statutory duty under the Consumer Credit Act to administer the consumer credit licensing regime, and must be satisfied that a licensee is fit to hold a consumer credit licence.
2. The Consumer Credit Act 1974, as amended, provides a wide range of protection for consumers accessing credit. All traders engaging in credit activities such as lending or brokering of loans must be licensed under the Act. All consumer credit licence holders must satisfy the OFT that they are fit to engage in those activities for which a licence is required and are subject to ongoing monitoring during the lifetime of the licence.
3. Where the OFT has evidence of any practices which appear to be unfair, misleading, oppressive, or improper, whether lawful or not, it has a range of enforcement powers including taking steps to refuse, revoke or suspend a licence; to impose requirements for a business to change its behaviour; or seeking undertakings or an Enforcement Order under the Enterprise Act 2002.
4. 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.
5. A breach of a requirement can lead to a fine of up to £50,000 and/or be grounds for revocation of a consumer credit licence.
6. Under section 155 of the Consumer Credit Act 1974, a consumer is entitled to a refund (less £5) of the fee paid to a credit broker if for any reason the consumer does not enter into a relevant agreement within six months of an introduction to a source of credit or hire.
7. Under the Financial Services (Distance Marketing) Regulations 2004, a consumer has the right to cancel their contract within 14 days and receive a refund of fees paid. For more information about these regulations go to the Consumer Direct website.
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