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Tribunal upholds refusal of credit licence - 24/09/2009
The Consumer Credit Appeal Tribunal has upheld the Office of Fair Trading’s refusal to grant a credit licence to a debt management company.
In the first appeal of its type, the Tribunal upheld the OFT’s decision to refuse to grant the licence to Qsolvency Ltd on the grounds that the company had insufficient skills, knowledge and experience in the running of a consumer credit business.
The OFT found that Qsolvency had failed to demonstrate the competence necessary to carry on a debt management business and failed to comply with its debt management guidance. The OFT also found that Qsolvency was engaged in unlicensed trading before it had obtained a licence.
Qsolvency’s website http://www.online-debt-advice.co.uk, which has now been taken down, contained content that the OFT and the tribunal concluded showed the company did not have the skills, knowledge and experience necessary to obtain a licence.
The OFT was concerned that the company only required a small amount of information about the consumer’s individual circumstances before providing instant, automated debt advice, which included advising the consumer to declare him/herself bankrupt.
Ray Watson (pictured), director of the OFT’s Consumer Credit Group said: "We welcome the decision of the Consumer Credit Appeals Tribunal supporting our refusal to grant a licence.
"Debt management is a high-risk activity involving people in serious financial difficulty and distress. It is vital that all those who operate or seek to operate within this market are able to meet the minimum standards set by the OFT for this sector."
The Consumer Credit Appeal Tribunal has upheld the Office of Fair Trading’s refusal to grant a credit licence to a debt management company.
In the first appeal of its type, the Tribunal upheld the OFT’s decision to refuse to grant the licence to Qsolvency Ltd on the grounds that the company had insufficient skills, knowledge and experience in the running of a consumer credit business.
The OFT found that Qsolvency had failed to demonstrate the competence necessary to carry on a debt management business and failed to comply with its debt management guidance. The OFT also found that Qsolvency was engaged in unlicensed trading before it had obtained a licence.
Qsolvency’s website http://www.online-debt-advice.co.uk, which has now been taken down, contained content that the OFT and the tribunal concluded showed the company did not have the skills, knowledge and experience necessary to obtain a licence.
The OFT was concerned that the company only required a small amount of information about the consumer’s individual circumstances before providing instant, automated debt advice, which included advising the consumer to declare him/herself bankrupt.
Ray Watson (pictured), director of the OFT’s Consumer Credit Group said: "We welcome the decision of the Consumer Credit Appeals Tribunal supporting our refusal to grant a licence.
"Debt management is a high-risk activity involving people in serious financial difficulty and distress. It is vital that all those who operate or seek to operate within this market are able to meet the minimum standards set by the OFT for this sector."
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