OFFICE OF FAIR
TRADING News Release (77/08) issued by The Government News Network
on 30 June 2008
The OFT has
revoked the consumer credit licence of Matthew St John Crossley
trading as the Debt Advisory Company. Through his websites http://www.thedebtadvisorycompany.co.uk
and http://www.advisorsondebt.co.uk,
Mr Crossley advertised 'free independent and impartial debt
advice' to consumers with serious debt problems. These
web-sites have been closed down.
He is understood to have advised consumers that re-mortgaging
would be the best way to solve their debt problems. The consumers
then released up to £30,000 equity in their homes and sent this to
Mr Crossley so that he could repay creditors on their behalf.
The OFT found that he had:
* failed to return monies to
consumers on request
* failed to make payments to any or all
of the consumers' creditors
* charged large initial and
ongoing fees that appeared to be disproportionate to the work
carried out; and
* made misleading statements and gave
misleading advice about the services he provided in order to
induce potential clients to enter into a contract.
Such conduct is in clear breach of the OFT's debt management guidance.
Mr Crossley previously operated across the UK and although his
exact current whereabouts are unknown, the OFT has received
information suggesting that he may now be living abroad. If he was
to continue to offer debt management services to UK consumers he
would be committing a criminal offence. He is understood to have
previously gone by the names of Matthew Crossley, and Matthew Prevett.
Ray Watson, OFT Director for Consumer Credit,
said:
'This is one of the most serious cases involving
debt management services we have encountered. We have evidence
that consumers parted with tens of thousands of pounds and
suffered increased financial hardship as a result of Mr St John
Crossley's activities.
'Following their dealings with Mr St John Crossley one
consumer was forced to sell his home, another was bankrupted and
another found himself facing bankruptcy and the loss of his home.
'If consumers with debt problems need help in resolving
their financial problems, they can obtain free advice from a range
of charities and organisations. Under no circumstances should they
seek such advice from Mr St John Crossley.'
NOTES
1. The OFT's Debt Management Guidance sets out
minimum standards of behaviour expected of licence holders
engaging in the provision of debt management services, which seek
to re-schedule customers' repayment of debt and charge for
doing so. A key principle of the Guidance is the requirement to
act in the best interests of the consumer. The Guidance also
states that advertisements and other promotional material must be
accurate and clear and must not mislead, either expressly or by
implication or omission. The spirit as much as the letter of the
Guidance would apply to businesses where their activities relate
to advising and/or otherwise assisting consumers with their debts.
2. The Consumer Credit Act 1974 (the Act) requires debt
management companies to be licensed by the OFT. The OFT can refuse
a licence if it decides that a trader is not fit to hold one. An
OFT decision to revoke a licence can be appealed within 28 days of
the date of the determination. The period in this instance has
now passed and no appeal was made.
3. The OFT published guidance for debt management companies in
December 2001. It applies to all those providing financial
management services including IVAs, personal bankruptcy and
commercial credit repair.
4. The Consumer Credit Act 1974 makes it a criminal offence to
engage in regulated consumer credit activities without a licence.
This offence is punishable by the imposition of fines,
imprisonment, or both.
5. Consumers who may be seeking debt management advice:
* can
obtain free advice from Citizens Advice Bureaux, Advice UK,
National Debtline and the Consumer Credit Counselling Service
* should consider all available options such as debt management
plans, IVAs, or bankruptcy and select the one which is best suited
to their own circumstances.
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