Office of Fair Trading
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OFT consults on power to suspend credit licences

The OFT is consulting on how it proposes to use a new power, which will allow it to suspend consumer credit licences with immediate effect or from a date it specifies, in certain circumstances.

The power will strengthen significantly the OFT's ability to protect consumers, allowing it quickly to put a stop to the licensable activities of businesses that otherwise would be able to operate until the end of an often lengthy appeals process. The OFT will be able to use the power only where there is an urgent need to protect consumers from harm.

In the most serious cases, which include those where there is evidence of physical harm to consumers, or the threat of such harm, the OFT proposes to suspend a licence with immediate effect.

The sorts of factors that the OFT will take into account when deciding whether to use the power include evidence that the business has engaged in violence, fraud, or dishonesty, or is targeting vulnerable consumers with harmful practices.

Other factors are likely to include a failure to address concerns raised by the OFT or partner organisations, such as Local Authority Trading Standards Services.

David Fisher, OFT Director of Credit, said:

'This is an important new power that will allow us to deal quickly with businesses posing an immediate and serious risk to consumers. 

'Following consultation with interested parties, we expect to use the power in serious cases where it is essential we prevent a business operating to protect people.'

The OFT consultation runs for 12 weeks. Final guidance will be published in February 2013. The new power is expected to come into effect in Spring 2013.

The consultation document can be downloaded from Consultation on the power to suspend consumer credit licences – draft OFT guidance for licence holders.


  1. The power is being provided by way of a Government amendment to the Financial Services Bill. It will take effect two months after Royal Assent and the Government therefore expects it to come in to force during the first quarter of 2013. Until the Bill has received Assent, the draft power remains subject to change. 
  2. The Consumer Credit Act 1974 requires businesses that offer goods or services on credit or lend money or are involved in activities relating to credit or hire to be licensed by the OFT.
  3. Once a licence is suspended, for the duration of the suspension a licensee will be treated in law as if they were unlicensed. Engaging in licensable activities whilst unlicensed is a criminal offence.

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