OFT turns down doorstep loan application

01/10/2009

A doorstep loans start-up has been refused a licence by the Office of Fair Trading (OFT).

U-Turn Financial Solutions, to be run by Andreas Haralambous and John Burchill, had made the application in the hope that they could offer the short-term high-interest credit to customers looking to solve debt problems.

The loans would have been secured on the borrowers' cars - meaning that U-Turn could have taken the vehicles if repayments were not made.

However, the OFT turned Mr Haralambous down after finding out through a Trading Standards investigation that he had previously operated an unlicensed loans company and had engaged in "unfair" business practices.

Ray Watson, OFT director of consumer credit, said: "Customers of credit offered or collected in the home are often vulnerable. Traders who seek to take unfair advantage of such people will not receive a credit licence and will not be allowed to trade."

Kevin Still, director of EuroDebt, added: "The recession has seen rising profits for pawn brokers and off high street lenders, often at very high interest rates. In many instances people are using a higher interest credit facility to repay another credit facility.

"This is the start of a debt spiral that is very difficult to break. People struggling with debt should take professional advice. Help with debt is at hand and should not involve further borrowing. EuroDebt offer an all-round advice model, not only Debt Management Plans and IVAs, but also solutions for the more vulnerable which may involve a referral to a local CAB or a competent authority for a Debt Relief Order."

Tags; Income Worries and Debt, Retirement Money Problems, Credit Card Lifestyle, Recent Graduate Debt,

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