The OFT kept its promise to stop unacceptable lending practices

Worryingly, the last few months has seen a considerable increase in the number of borrowers getting into debt trap and having no possibility to make their regular loan repayments in time. As a result, many borrowers are thinking about seeking assistance from those debt management companies, which they regard as trustworthy.

According to our earlier news, the OFT had notified more than a hundred of debt management companies that their consumer credit licenses would be withdrawn if they fail to change their improper lending practices. 

These companies were accused of taking advantage of vulnerable consumers, assuring them that their company was a charitable organisation and not telling them about fees for their service beforehand.

In a number of cases, these fees were so high that the customer ran into heavier debt instead of having their financial situation improved.

As many as 129 firms were warned and since that time, 35 companies have lost their licences, and 15 are likely to have their licenses withdrawn as well.

When people are in a tight spot and can’t manage their debts, they must be given professional assistance instead of being exploited further. The steps taken by the OFT are great news for UK borrowers.
 


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