OFFICE OF FAIR
TRADING News Release (92/07) issued by The Government News Network
on 26 June 2007
The OFT is today
announcing a formal consultation on the draft guidance on fitness
and requirements for holders and applicants of Consumer Credit
licences, as well as simultaneously consulting on a draft
statement of policy on civil penalties for failure to comply with requirements.
Copies can be downloaded at http://www.oft.gov.uk
Following reforms of the consumer credit legislation, the OFT is
issuing revised guidance on how it will decide whether a person is
fit to hold a Consumer Credit licence, and how the OFT will
exercise its power to impose requirements on licensees. The
OFT's powers have been strengthened by the reforms and this
new guidance explains how the OFT will identify those individuals
and businesses that pose greater risks to consumers, then remove
or refuse their consumer credit licences.
The guidance also outlines how the OFT proposes to use its new
power to impose requirements. These may be used on licensees when
the OFT is dissatisfied with their conduct or any other matter
relating to the licensed business Failure to comply with the
requirements could result in civil financial penalties - and the
OFT statement of policy on financial penalties sets out how the
OFT proposes to use this power. The general fitness guidance also
explains how the OFT will:
* work with Local Authority Trading Standards Services to check
that licensees have the skills and knowledge needed to carry out
the activities covered by the licence to a reasonable standard,
* issue most standard licences on an indefinite basis, instead of
every five years, but using the improved investigation and
information-gathering powers to request information from traders
at any time while they are licensed. In certain circumstances, the
OFT can also obtain a search warrant to enter premises and seize
documents. Currently information is only requested at the
application stage or during investigation. Ali Nikpay, OFT Senior
Director, said:
'The draft guidance and statement of policy explain how the
OFT will use its stronger and more flexible powers to take
targeted action and improve the functioning of the consumer credit
market. We welcome views of stakeholders on the approach that the
OFT is taking.'
The consultation period will last for 12 weeks and end on 21
September 2007. The final versions of the guidance and the
statement of policy, together with a report on the responses, will
be published on the OFT website at the end of the year.
NOTES
1 The fitness guidance will replace the general guidance
'Consumer credit licences - Guidance for holders and
applicants' (OFT329), which was last updated in 2003.
2 The Consumer Credit Act 1974 has been amended by the Consumer
Credit Act 2006 (CCA06). OFT is required under CCA06 to publish
fitness guidance and to issue a statement of policy on its use of
civil penalties. The statement of policy must be approved by the
Secretary of State for Trade and Industry. Some provisions of the
CCA06 are already in force, with the new Act fully implemented by
1 October 2008.
3 CCA06 introduces two new categories of ancillary credit
business, debt administration and credit information services.
4 A Consumer Credit Appeals Tribunal will be created to replace
the current system of appeal to the Secretary of State for Trade
and Industry for applicants who have been refused consumer credit
licences and for those whose licences are under threat of being revoked.
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