OFT publishes guidance for credit brokers and intermediaries

[Michael Browne]

The OFT has today published guidance which sets out the standards it expects from credit brokers and intermediaries.

 

The guidance sets out the OFT's view on unfair practices relating to advertising and sales, refunds of fees and complaints handling. It also outlines the responsibilities of businesses that use the services of credit brokers and intermediaries.

 

The guidance is designed to tackle unfair practices including:

 

• charging up-front fees and then not delivering the promised service
  
• unauthorised debiting of customer accounts
  
• inappropriately asking customers to use premium rate phone numbers, and/or keeping customers who have called a premium rate service on the line for unreasonably prolonged periods
  
• failure to refund, or delay in refunding, brokerage fees, in circumstances where a refund is due.
  

The guidance makes it clear that credit brokers and intermediaries need to be transparent about their status, whether independent or otherwise, the payment of fees, the consumer's right to refunds, and commission.

 

It also addresses a number of the issues highlighted in Citizen Advice's super-complaint earlier this year, including cold calling by telephone or text without the consent of the borrower and taking up-front fees from a borrower's bank account without the prior informed consent of the borrower.

 

David Fisher, Director of the OFT's Consumer Credit Group, said:

'The number of complaints in this area has risen significantly and is a cause for concern. Credit brokers and intermediaries must comply with our guidance. Any business that fails to do so will face the risk of enforcement action, which may include revocation of its licence.'

 

 

OFT guidance for brokers, intermediaries and the consumer credit and hire businesses