MSE News: Payday lender MCO banned after chasing fraud victims for cash

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"MCO has been stripped of its credit licence after allowing over 7,000 people to become unwitting victims of fraud..."
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Payday lender MCO banned after chasing fraud victims for cash

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  • fermi
    fermi Posts: 40,546 Forumite
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    OFT press release: http://www.oft.gov.uk/news-and-updates/press/2013/23-13
    Payday lender loses its licence after OFT action

    23/13 19 March 2013

    Online payday lender, MCO Capital Limited ('MCO'), has had its consumer credit licence revoked by the OFT and from today is no longer permitted to make regulated loans to UK consumers.

    Today's news follows the recent OFT payday lending review report, which uncovered evidence of widespread unfair business practices in the sector.

    In August 2012, the OFT found that MCO had failed to put in place adequate identity checks for loan applicants. It is thought that this failure led to MCO being targeted by fraudsters who used the personal details of over 7,000 individuals to apply successfully for loans totalling millions of pounds.

    The OFT also found that MCO had engaged in unfair business practices by writing to people who it was aware may not have taken out loans, asking unequivocally for repayment. MCO ignored OFT requests to stop this practice.

    Additionally, the OFT found that MCO lacked the necessary skills, knowledge and experience to run a consumer credit business.

    For all these reasons, the OFT decided to revoke MCO's consumer credit licence. MCO appealed the OFT's decision, but with effect from today withdrew its appeal. MCO is continuing to appeal the OFT's decision to impose a financial penalty of £544,505 for breaches of the Money Laundering Regulations 2007.

    David Fisher, OFT Director of Credit, said:

    'Removing MCO's licence is a timely reminder that payday and other lenders risk losing their licences if they engage in unfair business practices. The way MCO chased consumers for debts they did not owe was unacceptable and caused unnecessary distress to many people.'

    Consumers who are pursued by a lender for a debt they do not owe should write to the lender and, where appropriate, the debt collection agency, making it clear why payment is being refused. Further information on what consumers can do is available in this Consumer Fact Sheet and Advice Guide, produced by the Credit Services Association.

    NOTES
    1. The Consumer Credit Act 1974 requires most businesses that lend money to consumers or offer goods or services on credit or engage in certain ancillary credit activities to be licensed by the OFT. A licence is not required to provide certain types of credit such as that to high net worth individuals in specified circumstances.
    2. The OFT has a statutory duty under the Consumer Credit Act 1974 to administer the consumer credit licensing regime, and must be satisfied that a licensee is fit to hold a consumer credit licence.
    3. Trading without a licence in such cases is a criminal offence and can result in a fine and/or imprisonment.
    4. The First-tier Tribunal (Consumer Credit) forms part of the General Regulatory Chamber of the First-tier Tribunal. It is administered by the Tribunals Service, an agency of the Ministry of Justice. The role of the First-tier Tribunal (Consumer Credit) is to hear and decide appeals against decisions of the Office of Fair Trading relating to: Licensing decisions of the Office of Fair Trading made under the Consumer Credit Act 1974, the imposition of requirements or a civil penalty on licensees under the Consumer Credit Act 1974 and the refusal to register, cancellation of registration, or imposition of a penalty under the Money Laundering Regulations 2007.
    5. See press release OFT revokes payday lender's licence and imposes penalty of over half a million pounds (9 August 2012) when the OFT originally announced the action against MCO.
    6. The findings of the OFT's review of the payday lending sector can be found in its final report.
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    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
  • mattytun
    mattytun Posts: 13,920 Forumite
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    Good........:D
    Can't sleep, quit counting sheep and talk directly to the shepherd :cool:
  • rogerblack
    rogerblack Posts: 9,446 Forumite
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    What are the implications for the legitimate debtors to this company?
  • jamesd
    jamesd Posts: 26,103 Forumite
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    For the debtors, the main impact will be a prohibition on making new loans, which will ban rollovers if the firm treats them as new lending agreements. The firm will probably refer such business to other payday lenders, who should, if they follow the guidance given, refuse to accept the business because the need to roll over should be taken as an indication of lack of affordability. That in turn should mean that the company will need to make arrangements to pay for those who can't afford to repay on time.

    The business is also likely to reduce staff numbers and this may result in slower response times to questions.
  • fermi
    fermi Posts: 40,546 Forumite
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    From the websites of their various trading names.....
    MCO Capital has closed down it`s UK microcredit business.

    We want to thank all of our loyal customers of the past years.

    For additional inquiries regarding loan payments and collection, please contact our client service 084 3381 3381
    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
  • flymi
    flymi Posts: 2 Newbie
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    What does this mean if you currently have an outstanding loan with speed credit? In regards to paying it back.
  • jamesd
    jamesd Posts: 26,103 Forumite
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    edited 19 March 2013 at 8:56PM
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    Borrowers don't get their loans written off. Nice dream, but no. All that's blocked is new lending. They might choose to sell their loan book to another firm, though, so the other firm gets to do any chasing required. That's what they would undoubtedly do if they have also lost their licensing to do debt collection work.
  • hanlou007
    hanlou007 Posts: 99 Forumite
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    Still find it hard to believe that people use these firms if they cant afford to pay them back !!!
  • Brogden
    Brogden Posts: 1,173 Forumite
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    The shutting down of MCO is excellent news :j

    I still have payday loans and am currently working my way out of the problem. Last year I finally paid off Northern Debt Recovery following (foolishly) taking out a loan with Toothfairy.

    Now.......the OFT has destroyed MCO and they must be getting very close to the stinking corrupt mess that is Toothfairy / Northern Debt Recovery and Marshall Hoares Bailiffs. I understand when I have borrowed foolishly. I understand that I must pay back etc. However, what I saw from this scum over a period of several months in terms of (a) harrassment (b) misrepresentation (c) breaches of security (d) breaches of the Data Protection Act (e) pigeon english and sh*te grammar (f) misquoting of the law (g) abuse of basic human rights and decency....well........ it left me cold!

    There must be beads of sweat breaking out on the forehead of Oliver Larholt and those other duffers currently? Does anybody know what is going on here and can tell me more about the relationship between MCO and Toothfairy / NDR / MHB? I looked at the Speedcredit website and they are truly closed (YES!!!! It has happened!!!!!) I then went to Toothfairy and NDR, I even picked up the phone and sadly it seems it is (bent) business as usual.

    Please........does anybody know anything more????
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