One of Britain's biggest personal loan brokers, Yes Loans, has been shut down by the Office of Fair Trading (OFT) over its rogue practices. The company became notorious for such dodgy dealings as charging customers an upfront fee even though it was not always able to arrange a loan for them.
The OFT has had the firm in its sights for some time, first forcing it to improve its practices almost three years ago. Yesterday, it finally revoked Yes Loans' licence while accusing the company of "deceitful and oppressive business practices". It also shut down two associated businesses, Blue Sky Personal Finance and Money Worries.
The checklist of deceitful practices included lying to people to trick them into handing over debit or credit card details, and charging fees without telling customers.
It also put some customers into short-term, high-interest deals – such as payday loans – rather than more affordable credit. The OFT also accused it of misleading consumers into believing it was a loan provider rather than a credit broker, and treating customers poorly by not providing refunds in a timely manner.
The directors of Yes Loans said: "We have worked tirelessly to implement significant and fundamental advancements to the businesses. We are disappointed that, despite recognising this, the OFT has decided to revoke the licences of three long-standing businesses."
But David Fisher, the director of consumer credit at the OFT, said: "Belatedly changing business practices when facing the prospect of enforcement action by the OFT does not make a company fit to hold a credit licence."
Yes Loans, based in Cwmbran, South Wales, is run by three directors including 31-year-old Simon Chorlton, the son of original boss Keith Chorlton, who died of cancer last year. It posted profits of £2.2m in 2010 while paying out £1m in dividends to, presumably, its directors. The previous year the directors trousered dividend payments of £15m. The firm was first reprimanded by the OFT in July 2009 and told to change its unfair terms and conditions. It was also told to hand back unfair brokerage fees within 30 days.
Sarah Brooks, of Consumer Focus, said: "While the decision to revoke the licence is the right one, it appears long overdue," she said.
The OFT's Mr Fisher added: "We will take decisive action to tackle businesses that fail to treat people properly, especially the most vulnerable."