Are you offering consumers payday loan products in the U.K.? Yes? Then read this BCCA Publication and consider signing up for future Newsletters: BCCA What’s happening in The United Kingdom is simply a preview of CFPB actions here in the U.S.
Less than two weeks after the publication of the report, the OFT announced that with effect from 19th March 2013 online paydaylender, MCO Capital Limited (‘MCO’) had its consumer creditlicence revoked and was no longer permitted to make regulatedloans to UK consumers.
In August 2012, the OFT had identified that MCO “had failed to put in place adequate identity checks for loan applicants”, It is believed that this failure by MCO led to the company being targeted by fraudsters who used details from in excess of 7,000 individuals to apply successfully for loans totalling “millions of pounds”.
The OFT also found that MCO had “engaged in unfair business practices by writing to people who it was aware may not have taken out loans, asking unequivocally for epayment. MCO ignored OFT requests to stop this practice.” In addition the OFT stated that they found that “MCO lacked the necessary skills, knowledge and experience to run a consumer credit business.”
MCO appealed the decision but on 19 March withdrew its appeal. However it would seem that MCO are continuing to appeal the OFT’s decision to impose financial penalties amounting to in excess of £500,000 for anti-money laundering breaches.
David Fisher, OFT Director of Credit, said: “Removing MCO’s licence is a timely reminder that payday and other lenders risk losing their licences if they engage in unfair business practices. The way MCO chased consumers for debts they did not owe was unacceptable and caused unnecessary distress to many people”