Unlicensed Websites Offering Credit Closed
A total of 19 websites have been closed after it was discovered they did not have a license to offer loans to people seeking credit.
The Office for Fair Trading (OFT) announced the closure of the websites which target people with disabilities, those connected to the military and people with limited access to credit.
The websites do not have a license to be credit brokers and the OFT investigation discovered they were as such in breach of the Consumer Credit Act.
The OFT will continue to monitor the websites to ensure they do not reappear with different web hosts.
“Websites like the ones we have shut down target vulnerable people and those who may not have easy access to credit,” said David Fisher, OFT director of consumer credit.
“We advise consumers to think carefully before entering personal data into any lead generation website, in case this information is passed on without their knowledge.”
Consumers are being advised to act on the side of caution if a website asks for their personal details as they may as a result be contacted by a number of other unwanted companies.
What is the Consumer Credit Act?
The Consumer Credit Act 1974 states businesses must be licensed by the OFT to offer goods or services on credit or for hire, lend money, or offer credit brokerage, debt counselling or debt adjusting services.
Research by Sainsbury’s Credit Cards showed recently that 8.65 million people plan on taking out a new credit card over the next year.
While 28 percent are doing so to take advantage of the loyalty schemes many are offering, 26 percent are seeking new credit cards because the interest free period on their balance transfer has expired.
For 23 percent it is to find a lower rate of interest, and 15 percent are seeking a new credit card because the interest free period on purchases has expired.