OFT revokes companies' licences for misleading IVA mailings

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http://www.oft.gov.uk/news-and-updates/press/2011/56-11

OFT revokes companies' licences for misleading IVA mailings

56/11 15 April 2011

The OFT has found four businesses and/or their associates targeted consumers with misleading unsolicited mailings claiming the recipients may have been mis-sold an Individual Voluntary Arrangement (IVA).

As a result the OFT has revoked the consumer credit licences of Bankruptcy Limited (BL), Intl Marketing Limited (IML), UK Bankruptcy Limited (UKB) and UK Mortgage Link Limited (UKML).
The companies and/or their associates operated mainly out of the Dorset area.

Some were linked to potentially misleading trading names such as 'The IVA Council', 'IVA Review Board' and 'IVA Watchdog'. The businesses were associated with each other in various ways, including through certain common directors.

The mailings sent suggested that bankruptcy may be a better option for consumers, when this may not have been the case.

Consumers accepting the advertised services would have had to pay additional fees to switch to a different debt solution that may not have been in their best interests.

As such, the poor quality advice and misleading nature of the mailings breached the OFT's Debt Management Guidance.

BL and IML appealed against the OFT's decisions. The revocations of their licences took final effect when IML's appeal was struck out by the appeal Tribunal in March 2011 and BL withdrew its appeal in March 2011.

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

'Companies must not use misleading mailings or give advice that they know may not be in the interests of borrowers. Where the OFT has evidence that companies have breached its guidance, it will use its powers to stop them from doing so again.'

NOTES

1. The OFT also refused to grant licences to two other associated businesses, Petitions Direct Limited (PDL) and UK Restart Limited (UKR).
2. The OFT's action follows a warning to 12 debt management businesses on 5 June 2008 about issuing misleading IVA mailings.
3. The Consumer Credit Act 1974 (the Act) requires most businesses offering credit services, including lending money and high risk debt management activities, to be licensed by the OFT. The OFT can refuse or revoke a licence if it decides a trader is not fit to hold one. Details of the OFT's recent findings from the debt management guidance compliance review are in the press release OFT takes action to address widespread problems in debt management industry (28 September 2010).
4. For advice on dealing with debt, see the Directgov website.

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iquit

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