Payday lender banned

A payday lenders whose practices have consistently breached the law has had its licence revoked by the Office for Fair Trading (OFT).

MCO Capital has been banned and fined £544,505 for failing to even establish the identity of its loan applicants.

The actual offence is a breach of anti-money laundering laws, but the failure to carry out such checks also indicates the lender was not establishing if the borrowers were able to manage repayments.

However, the OFT found other faults in the firm's actions, such as writing to people it knew might not have taken out loans asking for payments.

It also continued this activity despite the OFT telling it to stop.

Commenting on the decision, director of financial services at Consumer Focus Sarah Brooks said: 'MCO's practices will have caused considerable distress for consumers, so it is good to see this action from the OFT."

However, she noted, under the current law the firm is allowed to continue trading until any appeal has been heard.

Posted by Paul Thacker