Credit firms warned over &quotunacceptable&quot court proceedings

Published on

The Office of Fair Trading (OFT) has issued a warning to the credit industry that taking court action against consumers outside their home jurisdiction is unacceptable.

An OFT investigation into retail finance company Creation Consumer Finance Ltd, which provides point of sale finance facilities through major retailers, home improvement suppliers and motor finance dealers, revealed that a firm of solicitors acting on behalf of the company was issuing proceedings against Scottish debtors in English courts.

The OFT regards this practice as unfair because the unfamiliar law and procedure involved in a court claim in a different jurisdiction, and any associated travel costs, may deter consumers from defending such action.

The OFT is warning all consumer credit licence holders that taking action or threatening to take action against consumers in a court outside their home jurisdiction is a breach of the OFT’s Debt Collection Guidance. Where there is evidence that businesses are engaging in such behaviour, the OFT will take action to ensure compliance with its guidance so that there is no repetition of the practice.

The requirements imposed on Creation Consumer Finance Ltd mean that the company must ensure that businesses and/or firms acting as its agent or sub-contractor in the course of any consumer credit licensable business comply with the OFT’s Debt Collection Guidance. It must also not issue and shall ensure that third parties acting on its behalf do not issue proceedings against a consumer in a jurisdiction other than that in which the consumer is domiciled.

Ray Watson, OFT director for consumer credit, said: “Issuing proceedings in a different jurisdiction is clearly unacceptable and lenders should take heed that the OFT will act to prevent this practice. Lenders must also be aware that they are fully responsible for the actions of third parties acting on their behalf

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

Mortgage brokers have little to fear from AI, says Mortgageforce boss

Mortgage brokers should embrace artificial intelligence rather than fear it will ultimately replace them,...

Waiting for completion causes greater anxiety than saving for a deposit

Delays towards the end of the homebuying process are a greater source of anxiety...

Leasehold delays put Christmas property completions under pressure

Homebuyers hoping to complete before Christmas face increasingly tight deadlines, with leasehold transactions and...

Conveyancing firms warned over risks of uncoordinated AI adoption

Conveyancing firms risk undermining the benefits of artificial intelligence unless they address weaknesses in...

Masthaven Finance revenue rises sixfold as lender enters FT growth ranking

Masthaven Finance has been placed 48th in the Financial Times' inaugural ranking of the...

Latest publication

Other news

Mortgage brokers have little to fear from AI, says Mortgageforce boss

Mortgage brokers should embrace artificial intelligence rather than fear it will ultimately replace them,...

Waiting for completion causes greater anxiety than saving for a deposit

Delays towards the end of the homebuying process are a greater source of anxiety...

Leasehold delays put Christmas property completions under pressure

Homebuyers hoping to complete before Christmas face increasingly tight deadlines, with leasehold transactions and...