In December 2013, consumer credit regulator the Office of Fair Trading (OFT) exercised its power to suspend a consumer credit licence with immediate effect when it withdrew the licence of Jonathan Edward Rochford, a Shropshire-based motor dealer who uses the trading name Phoenix Car Centre. No reasons were given in the release for the decision, but the OFT’s press release says that “suspending the licence is urgently necessary to protect consumers.”
Mr Rochford has until January 10 2014 to make representations regarding the decision to the OFT. The OFT’s Adjudicator can then decide whether to confirm the suspension, or withdraw it. When the OFT uses this power to suspend a licence with immediate effect it has 12 months to commence proceedings to revoke the licence permanently.
It was anticipated that the OFT would act in this way where there was evidence of fraud, dishonesty or violence; where there was a need to protect vulnerable customers; or where the firm failed to comply with previous instructions from the OFT or Trading Standards.
Most firms who are subject to OFT enforcement action are allowed to continue trading until appeals have been heard against decisions to revoke licences.
In March 2013, Mr Rochford was jailed for eight years for supplying class A drugs. Several other employees of the Phoenix Car Centre in Telford were also jailed for drugs offences at the same time.
This is only the third time the OFT has used this power since it came into force in February 2013. In June 2013, Donegal Finance Ltd, a Staffordshire-based credit broker and debt collector which used the trading names Donegal Finance, Donegal Investigations and Donegal Recovery was suspended from trading. Then in July 2013, Andrew James, a Worcestershire-based motor dealer who used the trading name Apex Car Finance, became the second to lose his licence in this way. On these two occasions, the OFT also gave no details of the reasons for the action.
Citizens Advice, a nationwide charity that offers advice on consumer issues, wrote to the OFT in April 2013 calling on it to suspend the licences of four payday lenders and three debt collection firms with immediate effect. None of the firms were named, but two of the lenders were said to be household names. However, given that eight months has now passed since then, it appears that the OFT did not consider that an immediate suspension was appropriate in these cases.