The Office of Fair Trading has warned sub-prime lender Swift, trading as Swift Advances and Swift Securities, that it must improve its lending and collections practices or risk losing its credit licences.
An OFT investigation found Swift was giving secured to loans to customers with poor credit histories or limited access to credit without checking whether they could afford it, verifying their income, taking account of their other financial commitments and fully checking the information provided in the application.
The OFT also uncovered evidence in some cases that Swift failed to fully explain the charges that could be incurred if customers fell into arrears and failed to look for alternative options before taking borrowers to court.
It says Swift must ensure proper assessments of a borrower’s ability to repay the loan are conducted, repossessions are taken as a last resort and must be transparent about its charges.
OFT director of consumer credit David Fisher says: “Credit businesses must lend responsibly – failure to do so can have a very serious impact on borrowers. We require Swift to significantly improve the way it carries out its business. If they fail to comply with these requirements, they will face further enforcement action.”