Tag Archives: oft

Office of Fair Trading to end loan fee scam

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According to a report on BBC, the loan fee scam which many consumer group has campaign against is now to be closed by OFT, more information about this follows in the except from the article by BBC:
Dishonest credit brokers that demand upfront fees for loans they have no intention of arranging will be closed by the Office of Fair Trading (OFT).

The measure is part of a general crackdown by the regulator following a complaint from Citizens’ Advice.

The charity said some unscrupulous firms were cold-calling thousands of potential borrowers and offering loans in return for hefty fees.

The OFT is making it mandatory for fees to be refunded if a loan is not agreed.

“Our evidence suggests some businesses are deliberately taking people’s money upfront with no realistic expectation of finding them the type of loan they need,” said John Fingleton, the OFT’s chief executive.

‘We will continue to take robust enforcement action against businesses using unfair or improper business practices and we are providing new guidance making very clear the kind of behaviour we expect from the industry.”

In parallel, the OFT will bring in new rules later this month for debt management firms to stop them making misleading claims in adverts, charging expensive fees upfront, giving poor advice or posing as charities.
Law change

The OFT is going to ask the government to consider changing the law to ban outright the practice of credit brokers demanding upfront fees in exchange for arranging loans.

full story here: bbc.co.uk/news/business-13604411

Credit and debit card surcharges Which? to the rescue?

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Credit & Debit Card Surcharges

A book once described how a tribe in Brazil trap monkeys. Well, its a trap and its not a trap because the trap does not actually contain a devise that physically restrain the monkey, the monkey is kept trapped by its own greed.
The trap is just a bottle with a nuts inside it, the neck of the bottle is wide enough to allow the monkeys hand through, but once the monkey grab hold of the nuts, the hand becomes a fist, which is too big to come out of the bottle, the monkey being too greedy (or not cleave enough) does not let go of the nuts and escape but stays there trying to pull its clenched fist out.

The above description is not unlike how some consumers behave when responding adverts that offer them cheap flights to some wonderful destination for £2. By the time hidden charges and cost of processing payment by credit card is added to the £2 the flight end up costing the same of even more expensive than the cost of the same flight will full service airline that do not apply hidden charges to their fares.

Low cost airline are not the only industry accused of applying unfair credit and debit card surcharges to their products and services, many other commercial organisations are accused as well. For consumers who feel their are being unfairly charged, a champion has emerged to take on the unfair charges on your behalf, its Which? the consumer organisation.

Which? described some of the charges levied on customers who pay online by debit or credit card for flights and other services as a “murky practice”. Which? is now filling a super-complaint to the OFT (office of fair trading). Consumer organisation have the statutory power to make super-complaints on behalf of consumer when. OFT is expected to investigate and respond to Which? super-complaint withing 90 days. If the OFT agrees with Which? that the organisation accused in the super-complaint have a case to answer, OFT will launch a full investigation which can result in fines or lays asking the concerned companies to make changes to what they charge customers for processing credit and debit cards.