15/12    8 March 2012

The OFT has decided that Yes Loans Limited, one of the UK's largest brokers of unsecured credit, is unfit to hold a consumer credit licence, as are two associated businesses, Blue Sky Personal Finance Limited and Money Worries Limited.

The decision to revoke the licences was taken in light of evidence that Yes Loans has failed to comply with the Consumer Credit Act 1974 and associated regulations, and with requirements previously imposed by the OFT.

The OFT found evidence that Yes Loans had engaged in unfair business practices, including:

• using high pressure sales tactics to persuade consumers to provide their debit or credit card details on the false premise that they were required for an identity and/or security check
• deducting brokerage fees without making it clear that a fee was payable, and/or without the consumer's consent
• failing to introduce some consumers to the product originally sought, frequently arranging short-term, high interest, loans instead
• misleading consumers into believing it was a loan provider rather than a credit broker
• treating customers poorly by not providing refunds in a timely manner.

Following the OFT's investigation, Yes Loans made a number of changes to how it operates, including no longer charging upfront fees. A number of other associated companies also surrendered or withdrew their consumer credit licences or applications.

Despite these changes, the OFT determined that the evidence of prolonged engagement in deceitful and oppressive business practices, and the continuing presence of some of the staff responsible for running the businesses, makes them unfit to hold a consumer credit licence.

David Fisher, Director of Consumer Credit at the OFT, said:

'We will take decisive action to tackle businesses that fail to treat people properly, especially the most vulnerable.   

'This action also makes it clear that belatedly changing business practices when facing the prospect of enforcement action by the OFT does not make a company fit to hold a credit licence'.

NOTES

1. The following associated companies surrendered their licence or withdrew their licence application following the OFT's investigation:
   
   i. Claims Assistance Bureau Limited (Application number 643578 - Withdrawn)
   ii. We Fight Any Claim Limited (Application number 643041 - Withdrawn)
   iii. No Worries Loans Limited (Licence number 622909 -Surrendered)
   iv. 141 Loans Limited (Licence number 576615 -Surrendered)
   v. Yes Money Limited (Licence number 568296 - Surrendered)
   vi. Lead Response Limited (Licence number 601454 -Surrendered)
   vii. Lead Locator Limited (Licence number 543829 -Surrendered)
   viii. Crossit Target Marketing Limited (Licence number 513389 - Surrendered)
2. The OFT imposed 15 requirements on Yes Loans licence in July 2009. See press release OFT imposes requirements on Yes Loans over credit brokerage services (16 July 2009) for information on these requirements.
3. Credit brokerage consists of introducing customers seeking credit or goods on hire to businesses that provide credit, or other credit brokers.
4. 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.
5. Under section 155 of the Consumer Credit Act 1974, a consumer is entitled to a refund (less £5) of the fee paid to a credit broker if for any reason the consumer does not enter into a relevant agreement within six months of an introduction to a source of credit or hire.
6. Yes Loans, Blue Sky Personal Finance Limited and Money Worries Limited have 28 days to appeal the OFT's decision. The determination is subject to appeals to the General Regulatory Chamber of the First Tier Tribunal. The OFT's decision will not take effect until the appeal period has concluded.
7. On 24 November 2011 the OFT published guidance setting out the standards it expects from credit brokers and intermediaries. See press release OFT publishes guidance for credit brokers and intermediaries (24 November 2011) for further information on this guidance.