Consumer law: OFT to decide whether action will be taken over unsolicited loan firms

Consumer law: OFT to decide whether action will be taken over unsolicited loan firms

Following a super-complaint from Citizens Advice, the Office of Fair Trading must make a decision on how to act towards companies that offer unsolicited loans to people who are desperate for money.

Many firms have been operating in a way that breaches fair trading laws, presenting themselves to people in need of money and offering unsecured loans.

But when the offer is taken up, the firms charge extortionate up-front fees, are expensive and difficult to get in touch with and often do not even hand over the loan.

Citizens Advice has come across many people throughout the UK who have been targeted by these companies, since the current economic climate has provided a “fertile ground” for such activity.

The credit companies operate by contacting people through text messages and phone calls which offer the victim an unsecured loan.

Apart from charging expensive up-front fees and sometimes not even handing over the loan, some companies even took victims’ bank details and withdrew money from their accounts without permission.

The only means of contacting the credit companies is through premium rate telephone numbers and victims found that, rather than managing to speak to the company that offered the loan, they were instead overwhelmed with calls and texts from other loan and debt management companies.

A super-complaint can be made to the OFT when something is “significantly harming the interests of consumers”. Once it has been made, the OFT must respond within 90 days. The deadline for this case is today (1 June).

Related links:
Read more on this story (BBC)
Read about fair trading (FindLaw)
Find local consumer law solicitors throughout the UK (FindLaw)

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