OFT refuses to give licenses to debt management companies

The OFT has refused to renew the credit licenses of debt management companies, and has being refusing new applications as part of its ongoing enforcement work to drive up standards in the sector.
There has been false claims made that advice was free and impartial and giving misleading and improper advertising
They have found that unfair business practices, including providing misleading and inaccurate information to consumers and failing to implement proper practices and procedures.
There has being a lack of the necessary skills, knowledge and experience to operate compliant consumer credit businesses in the debt management sector. A lack of training and experience meant some licensee would have had to rely too heavily on third party compliance support. This view was confirmed by the First-Tier Tribunal (Consumer Credit), which dismissed some appeals not to issue licenses.
Since the OFT’s 2010 review of the debt management sector, over 100 businesses have exited the market or been refused licenses to enter the sector.
David Fisher, OFT Director of Consumer Credit, said:
‘The OFT will not hesitate to refuse licenses to those who cannot establish that they are fit to operate a debt management business and we will revoke existing licenses where necessary. Our goal is to ensure that people in financial difficulty who pay for debt advice can be confident that they are dealing with businesses that are competent to give them good advice.’

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