OFT branded 'powerless'
The Office of Fair Trading is forever going after ne'er-do-well traders and slapping their wrists, but are they doing enough? Well, one consumer action group doesn't think so and has hit out at the OFT over the way it dealt with a rogue payday lender.
If you missed it, the OFT slapped MCO Capital Ltd by revoking their licence and hitting them with a £544,505 fine. Consumer Focus director of financial services Sarah Brooks isn't happy though, saying that the OFT was being a massive sissy and leaving people exposed to MCO's dodgy practices.
According to the OFT, MCO deliberately went after people it knew hadn’t taken out loans after its poor checks let criminals take out millions of pounds in their names.
Brooks said: "The difficulty is the OFT has no power to stop the company trading until the appeals process has finished. This means in practice the firm can continue to treat consumers unfairly and continue to ignore the OFT’s request to change its practices.
"This type of business behaviour is appalling and underlines the acute need for the power to revoke licences immediately as the government recently announced it plans to. This case shows the balance is currently way out of kilter, with the move to the FCA we are looking for the new regulator to have the power to ensure that we have a consumer credit market place where only well run companies that treat consumers fairly can prosper."
OFT director of credit David Fisher said: "This financial penalty sends out a strong message that businesses lending to consumers must have adequate anti-money laundering procedures in place."