The Office of Fair Trading has revoked the consumer credit licence of debt collection agency Carltons Business Limited, and subsequently called on companies collecting consumer debts to communicate clearly and fairly.Carltons appealed the initial decision of the consumer regulator (OFT) to revoke the Kent-based firm’s licence but a first-tier tribunal ruled in favour of the OFT’s decision.
In a statement, the OFT said the Tribunal’s ruling highlighted the need for credit businesses to check that when communicating with their customers they are clear, transparent and do not place undue pressure on the debtor.
It came after the Tribunal found that Carltons lacked sufficient skills, knowledge and experience to operate a consumer debt collection business, did not have practices or procedures to deal fairly and properly with consumers, and structured its payment demand letters to look like an official or legal document, which goes against OFT guidance.
The Tribunal also found that the managing director’s decision to describe himself to debtors as a lawyer intended to create a misleading impression, while Carltons was persistently obstructive in dealing with enquiries from the OFT and Trading Standards.
David Fisher, OFT director of consumer credit, said: “This decision reinforces the need for licensed debt collection businesses to comply with the relevant OFT guidance, otherwise they risk losing their licences. These businesses need to treat consumers fairly and be clear in all communications, providing accurate information that does not have the effect of misleading consumers.”