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

HSBC UK launches contest to help small firms raise their profile

New findings from HSBC UK suggest visibility remains a significant barrier to growth for...

Family Building Society expands borrowing capacity with revised affordability model

Family Building Society has increased borrowing power for owner occupier mortgages by up to...

LeadCrowd launches discounted lead marketplace for brokers

LeadCrowd has expanded its platform with the launch of a new marketplace selling discounted...

Vickers Young joins Stonebridge as firm pursues long-term expansion

Mortgage and protection firm Vickers Young has joined the Stonebridge network as it accelerates...

Finova warns specialist buy-to-let demand risks being held back by gaps in lender support

New analysis from Finova suggests that, despite strong margins and lower perceived risk, specialist...

Latest publication

Other news

What my Gen Z daughter can teach us about engaging young buyers

Younger people are often badged with some unfair stereotypes when it comes to protection...

Are your client relationships threatened by lenders’ new freedoms?

Can we expect lenders to try and tighten their grip on borrowers at their...

Why brokers are rethinking bridging

The bridging market has continued to strengthen this year. Data from the Bridging and...