Yes Loans practises a big no-no for OFT – license revoked

The Office of Fair Trading has taken a no-nonsense approach to instant cash loan firms that are not playing by the rules, in light of their investigation arising from a number of customer complaints. The licensed financiers soon won’t be as the OFT axe is falling swiftly and, seemingly, taking no prisoners.

Yes Loans is one the biggest firms in the UK that provide online short term loans for those desperate to make ends meet. But there has been much talk in the industry about some firms targeting ‘vulnerable’ customers or deliberately misleading customers into the finance agreements that they are taking out. But their days look numbered as the company, which is behind other brands of short term loans companies Blue Sky Personal Finance and Money Worries Limited to name just two, are in talks with legal firms to see if it is worth them launching an appeal against the OFT’s decision.

With so much pressure coming from the public and parliament, the writing was on the wall for one of the big names to take the fall after last year’s investigation into short term loans companies by the OFT gave them a surprising bill of health. But on this occasion, it does appear that Yes Loans have been the architects of their own downfall. Following warnings in the past, their act hasn’t been tidied up enough and they look like paying the heaviest price for that.

The OFT has branded the Yes Loan chains as ‘unfit’ to trade and has thus revoked their credit license, meaning that they can no longer offer financial services in the UK if their appeal fails. Given the ‘evidence’ we have seen so far from the investigation and first-hand complaints made about the instant cash loan company, it would appear that the label is fitting.

In several recent reports, we have heard that the front line staff have been incorporating high-pressure sales tactics and using contrived stories about security checks to get customers to hand over their debit and credit card information. It is also law to tell customers entering into a financial agreement if there are any up front fees involved; the company has been deducting those fees without providing that information.

And their web of deceit spins further. It would appear that Yes Loans have been masquerading as a loan provider when they are, in fact, only a broker, another sticking point in law, But worse than that, they have been leading customers to believe that they’ve been successful in obtaining unsecured finance at relatively low rates but, when the loans have been secured, the customer s have found themselves to be in a contract for high-interest short term loans, instead, commanding much more in interest than the original product said customer believed they had signed up for.

There is a stay of execution for the 28 days whilst the appeal goes through and, despite their best efforts to turn around this rather large ship, the directors (some of whom the OFT were extremely disgruntled to see still working there following the last investigation and recommendations) have assured the staff that there will be no redundancies until the OFT officially closes their door for the last time.

With the spotlight heavily on the sector, if these results prove to be grounded, the short term loans industry will be a better place without such firms slurrying the names of the innocent, making them very soft targets, indeed.

© 2024 All rights reserved. Reproduction in whole or in part without permission is prohibited. See our copyright rules.

What do you think?

Please note that email addresses are not visible on approved comments.