Sub-prime firm cannot broker loans
A major sub-prime firm accused of "deceitful and oppressive business practices" can no longer broker loans for customers after having its licence terminated, the trading watchdog has said.
Yes Loans confirmed it will not appeal against a decision by the Office of Fair Trading (OFT) to revoke its licence after the watchdog found that it had misled customers.
As a credit broker, the firm introduced consumers looking for a loan to businesses willing to provide one, but the OFT found that it arranged expensive payday loans for some consumers rather than the products they were initially asking about and misled others into believing it was a loan provider rather than a credit broker.
Yes Loans and an associate business named Blue Sky Personal Finance have decided not to appeal against the decision to revoke their licences, meaning they can no longer broker credit for consumers.
An appeal has been lodged by another associate firm, a debt management company named Money Worries, against the OFT's decision to revoke its consumer credit licence, which it can retain until the outcome of the appeal.
David Fisher, director of consumer credit at the OFT, said: "Yes Loans is one of the UK's largest credit brokers and this successful action sends out a strong message that we will not tolerate inappropriate behaviour by any businesses in this sector, large or small.
"Tough economic conditions mean that more vulnerable people are likely to use services provided by this sector so it's important that we continue working with industry to drive up standards."
A statement jointly issued by the directors of Yes Loans, Blue Sky Personal Finance and Money Worries emphasised that Yes Loans and Blue Sky will still be able to trade, but they will not be able to perform the activities covered by their consumer credit licences, in particular loan brokerage.
The statement said: "For the avoidance of doubt, our decision not to lodge appeals in respect of Yes Loans and Blue Sky is a strategic one, and in no way should this be considered as acceptance of the reasons given by the OFT to revoke the licences.
"We are saddened and disappointed at the stance taken by the OFT in their determination and lack of recognition of the major re-engineering that was undertaken towards the end of 2011 which addressed the major concerns they had highlighted."