The OFT announced this week that it will be increasing the cost of its overall fees for all applications, so as to ensure that a greater level of scrutiny is given to each case.
It is the OFT’s responsibility to assess all licence applications and decide whether the applicant is competent for the applied role, which could be debt counselling or other positions which are deemed ‘high-risk’ to the consumer, including sub-prime lending.
This increased ‘scrutiny’ means that the applicant could be subject to site visits, staff interviews and compliance reviews.
Ray Watson, OFT Director of Consumer Credit, said:”We strive at all times to minimise costs for regulated businesses but we must fulfil our statutory duty to protect consumers in their dealings with credit businesses. This increase will allow us to do so.”
In real terms, this increase will result in a sole trader paying £435 for a five year credit licence application, up £21 per year from previously. For all other applications from non sole traders, the price is £1,075, up a sharp £51 per year.
Yet despite the affect that the fee increase will have on the debt management sector, many industry professionals are applauding the OFT’s action and hoping that it will act as a barrier to entry from applicants who are unfit for the position and who reflect badly upon the reputation of the private debt management industry.
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