OFT REFUSES TO RENEW CREDIT LICENCE OF MOTOR TRADER

25 Jul 2003 11:15 AM

A Denbighshire-based motor dealer partnership, trading as Chadwick & Smedley, and Celtic Cars, has had its application for renewal of a consumer credit licence refused by the OFT.

An adjudicator found that one of the partners, David Chadwick, was the subject of a Disqualification Order for eight years made under section 6 of the Company Directors Disqualification Act 1986.

Mr Chadwick had previously been the controller of Celtic Cars (Rhyl) Ltd, which went into liquidation. As controller and director of that company Mr Chadwick had allowed it to continue to trade while he knew, or ought to have known, the company was unable to pay its debts, and permitted the removal of the company's assets by a creditor at the time when the company was insolvent. The company was also found to have sold motor vehicles without settling the outstanding finance owed to finance companies.

The adjudicator found that Mr Chadwick had contravened the Insolvency Act 1986 by continuing to trade under the name Celtic Cars (Rhyl) Ltd following the liquidation of the company.

Under the Consumer Credit Act 1974, businesses that are involved in consumer credit or hire must have a consumer credit licence. The OFT has a duty to protect the interests of consumers by monitoring the fitness of those holding and applying for licences.

In considering fitness the OFT can take into account a number of factors including:

- any offence or conviction of violence or dishonesty by the trader or anyone involved with running the business

- failure to comply with the provisions of the Consumer Credit Act or other consumer protection legislation

- consumer complaints

- evidence of unfair business practices

- evidence of discrimination on grounds of sex, colour, race or ethnic/national origin.

Christine Wade, Director of Consumer Regulation Enforcement, said: 'This is good news for Denbighshire consumers, protecting them from an unfit trader. The OFT will not hesitate to refuse an application for a consumer credit licence where there is evidence to suggest unfitness on the part of the applicant.'

NOTES
1. The Consumer Credit Act 1974 requires most 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.

2. The OFT can refuse or revoke a licence if it decides that a trader is not fit to hold one.

3. It should be noted that proceedings under the Act are not the same as those of a court and the adjudicator's findings are not the same as convictions by a court. Therefore where the adjudicator finds that an offence has been committed or that a provision of the statute has been contravened, it does not mean that the person concerned has been convicted under court proceedings of that offence or of that contravention.

4. An adverse determination (a refusal to grant a licence or the revocation of an existing licence) can be appealed to the Secretary of State for Trade and Industry.

5. The Consumer Credit Public Register is maintained by the OFT. The register documents traders that hold a licence and any action taken against them. It also details traders that have applied for a licence. Enquiries can be made to the Consumer Credit Licensing Bureau on 020 7211 8608.

6. The determination to refuse licence number 390479 was issued on 13 June 2003. The applicant was a partnership trading as Chadwick and Smedley and Celtic Cars. The partnership's main place of business was 6-8 Meliden Road, Prestatyn, Denbighshire, LL19 9RT.

PUBLIC enquiries: 0845 7224499 enquiries@oft.gov.uk OFT reports and consumer information leaflets are available free from: OFT, PO Box 366, Hayes UB3 1XB 0870 6060321 oft@eclogistics.co.uk