Online payday lender, MCO Capital has had its consumer credit licence revoked by the Office of Fair Trading (OFT).
It is now not permitted to make regulated loans to UK consumers.
In August 2012, the OFT found that MCO had failed to put in place adequate identity checks for loan applicants. It is thought that this failure led to MCO being targeted by fraudsters who used the personal details of over 7,000 individuals to apply successfully for loans totalling millions of pounds.
The OFT also found that MCO had engaged in unfair business practices by writing to people who it was aware may not have taken out loans, asking unequivocally for repayment. MCO ignored OFT requests to stop this practice.
The OFT also found that MCO lacked the necessary skills, knowledge and experience to run a consumer credit business.
For all these reasons, the OFT decided to revoke MCO’s consumer credit licence. MCO appealed the OFT’s decision, but with effect from today withdrew its appeal. MCO is continuing to appeal the OFT’s decision to impose a financial penalty of £544,505 for breaches of the Money Laundering Regulations 2007.
David Fisher, OFT director of credit, said: “Removing MCO’s licence is a timely reminder that payday and other lenders risk losing their licences if they engage in unfair business practices.
“The way MCO chased consumers for debts they did not owe was unacceptable and caused unnecessary distress to many people.”