The U.K.’s Office of Fair Trading has published guidance regarding when and how it will use its new ability to suspend consumer credit licenses, an authority granted to the regulator by the 2012 Financial Services Act.
Before the legislation, licensees undergoing proceedings regarding the suspension of their licenses were allowed to continue operation until all appeals were filed and adjudicated. Now, under the new authority, the OFT can suspend all of the business’ operations covered by the license, and the suspension will take effect as specified. Business transacted during a suspension period is considered unlicensed and, therefore, illegal, according to Lexology.
The OFT is required to provide notice to a licensee about a future suspension, and the notice must include the reason for the suspension, as well as the time period. Licensees have the right to appeal to an independent OFT arbitrator, who may decide to vary, revoke or uphold the suspension and appeal via a rehearing order to the First Tier Tribunal.
When deciding if a license should be suspended, the OFT will consider whether the business poses an immediate threat to consumers or demonstrates a pattern of abusive practices, the seriousness of the potential risk and the licensee’s response to complaints, requests and warnings, Lexology reports.
The OFT is required to record its decisions regarding license revocations in the Consumer Credit register, and the outcomes of each revocation case will be noted from the date they take effect, which could be immediately or from the notice’s specified date.