The Office of Fair Trading has confirmed 15 debt management firms are facing licensing action and a further 35 have surrendered their consumer credit licences.
The announcement comes as part of a compliance review and follows a warning to 128 firms in September that they face action if they fail to adhere to the OFT’s compliance guidance. The warning was made after the review found the debt management sector had widespread problems with compliance.
Since the warning, 35 firms have surrendered their licences, eight firms have been informed that the OFT intends to revoke their licences and a further seven companies who did not respond to calls from the OFT to submit evidence of compliance measures are currently being investigated.
The OFT is currently reviewing evidence submitted by 79 firms.
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.
OFT consumer credit group director Ray Watson says: “We are determined to improve standards in this sector, as the failings identified by our review are unacceptable. Companies providing debt management services should be in no doubt that we will act against bad practice and ensure consumers are protected.”