Debt management company has license revoked

A debt management company has had its licence revoked by the Office of Fair Trading (OFT), after it sent hostile correspondence to a debt collection agency.

The OFT ruled that Parkgate UK was unfit to hold a license as a result of the letter sent by one of the organisation's clients, which included a threat of physical violence against the agent if they tried to collect the client's arrears.

This, combined with other failings regarding its capability to manage a consumer credit business, led to the OFT taking action.

OFT director of consumer credit David Fisher said: "[The letter] called into question the company's fitness to hold a licence. We will not tolerate behaviour of this kind as it is a clear breach of the standards we expect."

Last month, the OFT published new guidelines to ensure debt management firms offer the best deal for consumers possible and provided for such standards as maximum transparency for fees and services.

Posted by Joe White