OFT Debt Collection Guidance
OFT Debt collection guidance
The Consumer Credit Act 1974 (the Act) requires most businesses that offer goods or services on credit or for hire, or that lend money to consumers, to be licensed by the Office of Fair Trading (OFT).
The OFT has a duty to protect the interests of consumers by ensuring the fitness of those holding or applying for consumer credit licences. The OFT also has a duty to monitor social and commercial developments relating to the provision of credit and related activities.
The OFT issues guidance for specific types of credit business where problems have been identified or where more detailed consideration of particular market circumstances is helpful. The OFT first issued specific guidance covering high risk debt recovery activities in July 2003 to set out the minimum standards of behaviour for all consumer credit licensees involved in this activity.
Alongside taking enforcement and licensing action to deal with breaches of the guidance, key strands of the OFT’s compliance strategy have been to raise awareness of the guidance in order to improve the quality of complaint evidence and facilitate enforcement action, and to work closely with trade associations and licensees to encourage and support compliance.
A key development reinforcing the OFT’s compliance strategy has been the implementation in 2008 of new powers to:
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assess the competence of business to engage or continue to engage in the high risk activity of debt collection
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impose requirements on licensees to change behaviour and improve compliance.
Source OFT
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