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OFT strips Yes Loans of credit licence

OFT strips Yes Loans of credit licence

Category: Loans

Updated: 08/03/2012
First Published: 08/03/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

One of the UK 's largest brokers of loans, Yes Loans, is facing going out of business after it was stripped of its credit licence.

The decision to revoke the licence has been taken by the Office of Fair Trading (OFT), with two of Yes Loans' associated businesses – Blue Sky Personal Finance Limited and Money Worries Limited – also having their licences taken.

The firm has 28 days to appeal the decision and can continue to trade during the period, but the OFT has indicated that it wants to see the business shut down permanently.

It is not the first time Yes Loans has been the focus of the watchdog, with the broker told to change the way it conducts its business in 2009.

However, the OFT said it had failed to comply with these rulings.

In addition, Yes Loans was found to have engaged in other unfair business practices, including:

  • using high pressure sales tactics to persuade consumers to provide their debit or credit card details on the false premise that they were required for an identity and/or security check
  • deducting brokerage fees without making it clear that a fee was payable, and/or without the consumer's consent
  • failing to introduce some consumers to the product originally sought, frequently arranging short-term, high interest, loans instead
  • misleading consumers into believing it was a loan provider rather than a credit broker; and
  • treating customers poorly by not providing refunds in a timely manner.

Yes Loans has made a number of changes to how it operates, including no longer charging up-front fees.

But the OFT has signalled it has no intention of allowing the business to continue operating.

"Despite these changes, the OFT determined that the evidence of prolonged engagement in deceitful and oppressive business practices, and the continuing presence of some of the staff responsible for running the businesses, makes them unfit to hold a consumer credit licence," said the watchdog.

David Fisher, Director of Consumer Credit at the OFT, added: "We will take decisive action to tackle businesses that fail to treat people properly, especially the most vulnerable.

"This action also makes it clear that belatedly changing business practices when facing the prospect of enforcement action by the OFT does not make a company fit to hold a credit licence."

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