OFT publishes new guidance for credit brokers and
intermediaries
In November 2011, the OFT
published new guidance for brokers, intermediaries and those
consumer credit and hire businesses that employ or use their
services.
The primary aim of the guidance is
to set out the standards expected from credit brokers and
intermediaries when dealing with actual or prospective borrowers,
from advertising and sales to refunds, fees and complaints
handling.
The guidance also sets out how the
fitness test under section 25 of the Consumer Credit Act 1974 will
be applied in respect of credit brokerage activities,
explaining the way in which the OFT uses various tools where
it has concerns about any aspect of a business's activities or
behaviour, together with illustrative examples.
In particular, the guidance sets
out what the OFT expects from credit intermediaries (likely to
include many credit brokers), in respect of transparency with
regards to their status and any financial consideration being
received. It also provides guidance on what the OFT
considers to be the responsibilities of those lenders who do
business with credit brokers and intermediaries.
The guidance is split into eight
chapters, including general principles of fair business practice,
marketing practices, post-contractual issues, refund of brokerage
fees, complaints handling and regulatory compliance and
enforcement.
