The Office of Fair Trading(OFT) Revoked License of First Step Finance Limited

By:  20/11/2012
Keywords: Debt consolidation, debt management

The consumer credit license of First Step Finance(FSF) has been revoked by the office of fair trading(OFT). This company had been under investigation by the office of fair trading since 2010 but took the decision to remove its license because it failed to highlight to its clients the risks associated with its business model. It is found that consumers make payments to the company and build up a fund that is used to offers creditors to settle their debts.

In an interview the OFT said that FSF didn’t inform consumers that there could be a period of time when their debt would not be reduced, perhaps creating further arrears. On the other hand director of consumer credit at office of fair trading said that people in debt are often vulnerable and expected integrity and transparency from debt management firms.

First Step Finance couldn’t meet the office of fair trading standards of its legal procedure. So, we are removing their consumer credit license. It also seen that the firm did not explain the consequences should a client exit their scheme early. So, a consumer’s debt was not reduced effectively and they could face further arrears and charges.

Ahmad Butt who is a member of the FSF said that he was surprised after seeing the outcome of the two-year adjudication process and that firm had launched an immediate appeal. He added the detail of the OFT’s contrary to FSF’s Current and resent trading approach. It is also seen that the whole process took so much time if the OFT had the concerns now set out in the decision.

Until the process of appeal is completed, First Step Finance remains licensed for doing credit activities.

Keywords: Debt consolidation, debt management



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