The Office of Fair Trading (OFT) has today suspended, with immediate effect, the consumer credit licence of Staffordshire-based Donegal Finance Limited (DFL) – trading as Donegal Finance, Donegal Investigations and Donegal Recovery.
This is the first time the OFT has used its new power to suspend a credit licence. It concluded that suspending DFL’s licence is urgently necessary to protect consumers.
DFL was licensed to offer consumer credit, credit brokerage and debt collecting services. The suspension means it is now a criminal offence for DFL or any of its directors, employees or agents to engage in any of these activities using DFL’s licence.
DFL has been invited to make representations to the OFT. The OFT’s Adjudicator will take into account the representations and decide whether to confirm the suspension (with or without variation) or withdraw it.
An amendment to the Consumer Credit Act 1974 came into effect on 19 February 2013 and gave the OFT the power to suspend a consumer credit licence where it appears urgently necessary to do so for the protection of consumers.
The OFT published guidance in February 2013 setting out how and when it can use the new power to suspend a credit licence. The guidance establishes that in the most serious cases, which include those where there is evidence of immediate harm, the OFT will suspend a licence with immediate effect. In other circumstances, businesses will be given an opportunity to make its case to an adjudicator before the suspension takes effect.