The U.K.’s Office of Fair Trading said in guidance issued on Friday that its authority to suspend consumer credit licenses will only be used if there is an “urgent need” to protect consumers from harmful practices.
Under the Financial Services Act of 2012, the OFT is authorized to suspend the activities of licensable businesses if they are found to have engaged in practices that have caused or could potentially cause physical or economic harm to consumers. Such practices may involve fraud, dishonest, targeting vulnerable customers or violence, Mortgage Strategy reports.
“This important new power strengthens our ability to protect consumers from harm,” David Fisher, the director of the OFT’s consumer credit office, said, according to Mortgage Strategy. “We will not hesitate to use it in the most serious cases where there is an urgent need to protect people. [Friday’s] guidance has been produced following a consultation to which industry, consumer groups and others responded.”
Stephen Sklaroff, the director general of the Finance and Leasing Association, said that the OFT makes it clear that its new authority will only be used in the most serious cases while other firms will have the ability to make their cases in court.
“A similarly proportionate approach will be needed in the design of the completely new regulatory system for credit which the Government intends to introduce early in 2014,” Sklaroff said, Mortgage Strategy reports. “The sooner we see the content of the new regime the better. Time is now growing short for the detailed discussions which will be needed to ensure the continued provision of affordable and responsible credit to millions of U.K. consumers.”