The Office of Fair Trading (OFT) is to take action against at least 15 debt management firms as the regulator finalises its crackdown on the sector. Amril strongly support this and believe that this industry needs more clarification and regulation to protect its clients from unprofessional behaviour.
Graham Sands, the MD of Amril discussed this issue with a potential client and was informed that one DCA was using the funds collected to bolster their own cash flow. This is totally unacceptable and I would strongly recommend that any company that suffers this outrage should inform the OFT immediatley and take a note of their Consumer Credit Licence Number.
DCAs are a service support for consumers and businesses alike and need to raise the bar in education and support, those that don’t, need to be clamped down on and barred from practicing.
Ray Watson, director of the OFT’s consumer credit group said: “We are determined to improve standards in this sector, as the failings identified by our review are unacceptable.”
The body has completed its compliance review into a swathe of debt management firms and warned at least 15 they will face licensing action, specifically the revocation of their consumer credit licences. The affected firms have the right to make representations to an adjudicator before a final decision is made.
Eight firms have already been informed of the intention to have their licences revoked and the OFT is investigating another seven companies which have not responded to its warning to improve compliance.
The news follows an OFT report issued in September 2010, which warned 129 debt management firms that they would lose their consumer credit licences unless they took immediate action to comply with its debt management guidance. Seventy nine firms met the December 16 deadline to submit audit reports which demonstrated improvements in their compliance, which will now be reviewed by the OFT.
Firms which have met the deadline but failed to meet the compliance standards may also face action to revoke their licences. The OFT confirmed that 35 companies have already surrendered their consumer credit licences as part of the process.