Payday loan company’s licence revoked
Credit broker Yes Loans has had its licence revoked by the Office of Fair Trading (OFT) over concern that its business practices ‘deceitful and oppressive’.
Two associated businesses, Blue Sky Personal Finance and Money Worries Limited, have also been found to be unfit to hold a consumer credit licence.
Following a long-term investigation, the OFT revealed that Yes Loans sold expensive payday loans to some customers instead of the products they had enquired about.
It also misled some customers into believing it was a loan provider rather than a credit broker and duped customers into revealing their card details by claiming they were needed for security checks.
The decision to revoke Yes Loans’ licence was welcomed by consumer groups.
A joint statement by the firms said: “We have all worked tirelessly to implement significant and fundamental advancements to the businesses.
“We are disappointed that, despite recognising this, the OFT has decided to revoke the licences of three long-standing businesses, which provide a loans brokerage service and other personal financial services to many thousands of satisfied customers.
“We are currently taking advice with regard to lodging an appeal against the decision. No jobs are at risk within the companies concerned, regardless of the outcome of any appeal.
“Currently and throughout any appeals process, our licences remain valid and allow us to continue to trade.”
A new report by MPs claims that payday loan companies are ‘opaque and poorly regulated’.
With household incomes under increasing pressure from the high cost of living, high levels of unemployment and the government’s ongoing austerity measure, the use of Payday Loans has soared.
Despite this, the Business, Innovation and Skills (BIS) Committee said that little progress has been made to address areas of concern that were raised a year ago.
Adrian Bailey MP, chairman of the BIS committee, said: ‘We must be certain that this industry adheres to the highest standards through the codes of practice that are currently being developed or by the new regulator’.