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OFT imposes requirements on Reset Finance over credit brokerage adverts
The OFT has imposed requirements on Reset Finance Ltd to ensure that it complies with credit advertising regulations.
21/10 26 February 2010
The OFT has imposed requirements on Reset Finance Ltd (Reset) to ensure that it complies with credit advertising regulations.
Reset operates 'lead-generating' websites that advertise products including subprime credit. Through these websites, the company introduces borrowers to lenders.
The OFT monitored the content of the firm's websites and identified a number of advertisements that it considered breached the Consumer Credit (Advertisements) Regulations 2004.
The imposition of the requirements means that Reset's future credit advertisements must comply fully with the Consumer Credit (Advertisements) Regulations 2004. They must:
The OFT will monitor Reset's compliance with the requirements. Failure to comply can lead to further action by the OFT, including the imposition of fines.
Reset has fully co-operated with the OFT during its investigation.
The OFT is also warning other lead generator and price comparison sites with advertising that leads to credit deals that they act as credit brokers and must comply fully with the Consumer Credit Act 1974 and the Regulations.
Ray Watson, OFT Director of Consumer Credit said:
'Lead generator and price comparison websites are an increasingly important means for putting potential borrowers in contact with lenders.
'These companies must comply with consumer protection law, in the same way as those selling credit directly, to ensure potential customers have clear, up-front information on which to base decisions. Businesses similar to Reset should check they are complying with the law to avoid possible action by the OFT.'
NOTES
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21/10 26 February 2010
The OFT has imposed requirements on Reset Finance Ltd (Reset) to ensure that it complies with credit advertising regulations.
Reset operates 'lead-generating' websites that advertise products including subprime credit. Through these websites, the company introduces borrowers to lenders.
The OFT monitored the content of the firm's websites and identified a number of advertisements that it considered breached the Consumer Credit (Advertisements) Regulations 2004.
The imposition of the requirements means that Reset's future credit advertisements must comply fully with the Consumer Credit (Advertisements) Regulations 2004. They must:
- include the Typical Annual Percentage Rate (typical APR) in circumstances where this must be legally stated
- ensure that the typical APR is given greater prominence than certain other information in the advertisements, and
- clearly state whether security for the loan may comprise a mortgage or charge on the debtor's home.
The OFT will monitor Reset's compliance with the requirements. Failure to comply can lead to further action by the OFT, including the imposition of fines.
Reset has fully co-operated with the OFT during its investigation.
The OFT is also warning other lead generator and price comparison sites with advertising that leads to credit deals that they act as credit brokers and must comply fully with the Consumer Credit Act 1974 and the Regulations.
Ray Watson, OFT Director of Consumer Credit said:
'Lead generator and price comparison websites are an increasingly important means for putting potential borrowers in contact with lenders.
'These companies must comply with consumer protection law, in the same way as those selling credit directly, to ensure potential customers have clear, up-front information on which to base decisions. Businesses similar to Reset should check they are complying with the law to avoid possible action by the OFT.'
NOTES
- Read the requirements imposed upon Reset (pdf 57kb).
- The OFT's role in consumer credit is focused on the protection of consumers, especially those more vulnerable or open to detriment. If a company's practices or procedures or its integrity or lack of competence cause the OFT any concerns, it will look to intervene to protect consumers from actual or potential harm.
- The OFT has previously published guidance on the Regulations, as well as frequently asked questions, to help businesses in producing credit advertising which complies with the Regulations (see Credit Advertising).
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