Responding to the OFT fine and revoking of MCO Capital Ltd’s licence, Sarah Brooks, Director of Financial Services at Consumer Focus, said:
‘MCO’s practices will have caused considerable distress for consumers, so it is good to see this action from the OFT. However the difficulty is that currently the OFT has no power to stop the company trading until the appeals process has finished. This means in practice that the firm can continue to treat consumers unfairly and continue to ignore the OFT’s request to change it’s practices. This type of business behaviour is appalling and underlines the acute need for the power to revoke licences immediately as the government recently announced it plans to.
‘The problems with MCO have been going on for two years and show just how difficult it is for the regulator to tackle poor practice. There is always a balance to be struck between protecting consumers and managing the burden of regulation for firms. This case shows that that the balance is currently way out of kilter. With the move to the FCA we are looking for the new regulator to have the power to ensure that we have a consumer credit market place where only well run companies that treat consumers fairly can prosper.’