The Office of Fair Trading (OFT) has published a series of measures concerning the marketing and charging practices used by credit brokers and debt management companies.

The credit regulator says this is a result of concerns raised about their impact on vulnerable consumers.

The OFT is publishing two new pieces of guidance: on the standards it expects of credit brokers, and on debt management.

The OFT is also asking the government to consider whether new legislation is needed to address problems in the sub-prime unsecured credit brokerage market, including a possible ban on upfront fees. These measures are detailed in the OFT’s response to a super-complaint from Citizens Advice.

The regulator estimates that 270,000 UK consumers paid an upfront fee to a sub-prime, unsecured credit broker in the last 12 months, typically between £50 and £70, on the expectation of being offered an unsecured loan. Complaints to Consumer Direct about these upfront fees more than doubled between 2008 and 2010.

The OFT’s super-complaint response suggests a number of businesses in the sub-prime, unsecured credit brokerage market, have business models based on taking upfront fees for a service they are unlikely to provide. Consumers are often not introduced to a loan in exchange for the fee or are offered loans that are different from those they expected. The evidence suggests some brokers also often fail to pay refunds to consumers who are entitled to them.

Consumers may now have a right to a refund of the upfront fee, under general contract law, where no introduction to a lender is made. The OFT also now expects brokers, six months after introducing a consumer to a lender, to advise any consumer who has not entered into a relevant agreement of their statutory right to a refund of the upfront fee.

The OFT also intends to publish revised debt management guidance later in June 2011, designed to tackle a range of bad practices it has identified. This follows a period of high profile enforcement action following a warning to 129 debt management businesses in September 2010.

The OFT’s super-complaint response also considers other possible problems in these sectors, including cold calling.

John Fingleton, OFT chief executive, said: “The super-complaint from Citizens Advice has been timely given our ongoing work to protect vulnerable consumers from poor practice in the credit sector.