Unsecured loan providers NIZ Financial and First Money Direct have had their consumer credit licences revoked by the Office of Fair Trading, prompting the regulator to warn credit brokers to improve the way they deal with customers’ upfront fees.
NIZ Financial’s licence was revoked after the OFT found that the firm had debited customers without their authority, taken brokerage fees before loans had been provided or offered later at a lower amount or higher interest rate, and not refunded brokerage fees when asked to do so.
The OFT also discovered that First Money Direct misled a customer about the brokerage services it offered and did not provide a prompt refund of upfront fees when it was required to do so. NIZ Financial and First Money Direct will have the chance to appeal the withdrawal of their licence before the decision becomes final.
Following the removal of the licences the OFT has warned that credit brokers must improve the way they deal with upfront fees charged to customers or face having their licences revoked.
The two firms were also associates of Carter & Carter Financial (Management) Limited, theloansupermarket.co.uk Limited, Easysteploans (UK) Limited and TLG Loans Limited, which were closed down by the Insolvency Service in May 2010.