OFT imposes requirements on log book loan business

Published on

OFT

The Office of Fair Trading (OFT) has granted Hermes Property Services Ltd the right to use the trading name Log Book Loans.

Before doing so the OFT conducted a detailed investigation, including an on-site visit, and is satisfied that Hermes has no ongoing relationship with the owners of Nine Regions Limited (Nine Regions) – a business that previously used the Log Book Loans trading name.

Hermes acquired part of the loan book, the staff and business premises of Nine Regions in February 2012, shortly after the First Tier Tribunal struck out Nine Regions’ appeal against the revocation of its consumer credit licence and the business went into administration.

However, following the investigation, the OFT had concerns about some of Hermes’ business practices. The company cooperated fully with the OFT and proposed requirements to address them. The concerns were that:

  • Affordability assessments were not being completed to a satisfactory standard.
  • The explanation of the product was inadequate and was not being given to borrowers early enough in the transaction.
  • Staff were not fully trained on or familiar with procedures on conducting affordability assessments or providing explanations about the products.

The OFT has accepted Hermes’ proposals and imposed requirements to secure the changes to its business practices and to ensure it complies fully with the OFT guidance and law. Hermes could be fined if it fails to comply with the requirements, which include relevant parts of the Consumer Credit Trade Association Code of Practice on log book lending.

“We took this action to make sure that Hermes meets the standards we expect and we will be monitoring the business to make sure it observes the requirements we have imposed,” said David Fisher, the OFT’s director of credit.

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

Virgin Money and Clydesdale to cut SVR to 6.74% after Bank rate move

Virgin Money and Clydesdale Bank are reducing selected variable and tracker rates following the...

INDUSTRY REACTION: Bank rate cut passes by narrow margin

At its meeting ending on 17 December 2025, the Monetary Policy Committee voted by...

Gen H widens credit criteria to support more first-time buyers

Residential mortgage lender Gen H has extended its internal credit criteria in a move...

LMS appoints chief financial officer

LMS has strengthened its senior leadership team with the appointment of Alexi Walsh as...

Paragon targets care home development with new specialist funding

Paragon Development Finance has launched a dedicated funding product for the development of care...

Latest publication

Other news

Virgin Money and Clydesdale to cut SVR to 6.74% after Bank rate move

Virgin Money and Clydesdale Bank are reducing selected variable and tracker rates following the...

INDUSTRY REACTION: Bank rate cut passes by narrow margin

At its meeting ending on 17 December 2025, the Monetary Policy Committee voted by...

Gen H widens credit criteria to support more first-time buyers

Residential mortgage lender Gen H has extended its internal credit criteria in a move...