OFT to stop loan fee scams
The Association of British Credit Unions Limited (ABCUL) has welcomed an announcement from the Office of Fair Trading (OFT) that it is to crack down on unscrupulous lending practices.
In newly published guidance, the OFT sets out plans to refund any upfront fees if a broker does not introduce a client to a lender, as well as to advise customers of their right to a refund six months after being introduced to a lender, if they still have no formal agreement in place.
Responding to the steps, ABCUL says it is good to see action being taken following an "explosion" in companies charging up-front for services that then do not materialise.
Chief executive Mark Lyonette comments: "Credit unions have been inundated with enquiries from people referred to them by credit brokerage companies and are rightly angered that financially vulnerable people have been persuaded to pay such brokers a hefty fee."
In exchange for this fee, he adds that some customers of the more unscrupulous brokers face a service that amounts to little more than the handing over of the broker's own contact details.
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