Thirty five debt management firms have surrendered their consumer credit licences and at least 15 are facing licensing action as a result of an Office of Fair Trading (OFT) compliance review.
Today’s announcement follows an OFT warning to 129 firms in September 2010, after its review of the debt management sector found widespread problems with compliance.
Since this warning was issued 35 firms have surrendered their licences, eight firms have been informed that the OFT intends to revoke their licences, a further seven companies who did not respond are currently being investigated, and 79 firms have submitted evidence, which the OFT will now review.
All firms were asked to provide evidence of compliance measures by 16 December 2010.
The OFT is currently analysing the content of the audit reports received from 79 firms and will contact each business to discuss its findings. Those who fail to meet compliance standards may also find themselves subject to licensing action.
As well as taking enforcement action, the OFT is updating its debt management guidance to take account of new and emerging unfair business practices identified in the course of its review.
Ray Watson, director of the OFT’s Consumer Credit Group, said: “We are determined to improve standards in this sector