Law Society of Scotland
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Consumer Law

Debt Collection: Revised OFT Guidance on Debt Collection

Revised OFT guidance on debt collection was published in October 2011. Following representations received, the OFT decided to undertake a supplementary consultation on its position on use of 'continuous payment authority' as a means of recovering monies owed in respect of consumer credit related debts as set out in paragraph 3.9m of that document.

The OFT are also taking this opportunity to consult on the specific practice of debiting monies from an account in the absence of having the express authority to do so (including under circumstances in which the lender may have the authority, under a continuous payment authority or otherwise, to recover monies from another account(s)). This practice is dealt with in what could, subject to consultation, become a new paragraph 3.9n of the Guidance. This would replace what is currently the third bullet point of paragraph 3.9m in the revised Debt Collection Guidance.

Payment Protection Products: FSA/OFT joint consultation

The OFT and the Financial Services Authority (FSA) are jointly consulting on proposed guidance to firms in relation to payment protection products.

These are products designed to meet similar consumer needs to payment protection insurance (PPI), and include debt freeze and debt waiver offered as part of a regulated consumer credit agreement or mortgage.
The proposed guidance is a result of joint working by the OFT and the FSA in the light of the Competition Commission's market investigation into PPI and emerging concerns about new protects and practices.
The OFT's part of the proposed guidance sets out how the OFT considers the Consumer Credit Act 1974 (CCA) applies to payment protection products, and what firms can do to ensure compliance with the CCA. It also sets out examples of business practices which the OFT is is likely to regard as unfair or improper (whether unlawful or not) and may cast doubt on fitness to hold a consumer credit licence.

The OFT and the Financial Services Authority ointly consulted on proposed guidance to firms in relation to payment protection products.  These are products designed to meet similar consumer needs to payment protection insurance (PPI), and include debt freeze and debt waiver offered as part of a regulated consumer credit agreement or mortgage.

The proposed guidance is a result of joint working by the OFT and the FSA in the light of the Competition Commission's market investigation into PPI and emerging concerns about new protects and practices.

The OFT's part of the proposed guidance sets out how the OFT considers the Consumer Credit Act 1974 (CCA) applies to payment protection products, and what firms can do to ensure compliance with the CCA. It also sets out examples of business practices which the OFT is is likely to regard as unfair or improper (whether unlawful or not) and may cast doubt on fitness to hold a consumer credit licence.