1st Credit Gets Warning From The OFT
Debt buyer and collections agency 1St Credit has appointed Rothschild to renew and increase its funding lines. The company`s funding runs until 2010 but it is seeking additional facilities to buy portfolios of debt.Its current funders are Barclays, Citibank and Europe Arab Bank.
The move follows a difficult month for 1st Credit after the Office of Fair Trading (OFT) imposed requirements on the company for failing to meet satisfactory collections standards.
It said the company must not threaten bankruptcy where it is unlikely that proceedings will be initiated and must not discuss legal action with consumers unless it is likely that course of action will be taken. In addition 1st Credit has been warned about dealing appropriately with sensitive cases involving vulnerable individuals, for example those with mental health or medical problems.
Failure to comply with the requirements could lead to a fine of up to £50,000 for each occurrence and/or possible revocation of 1st Credits license. 1St Credit must report back to the OFT every six months.
1st Credit chief executive Najib Nathoo took over in November last year after Mike Cleary stepped back from the role to become president. Nathoo has already implemented several changes to process - such as the way letters are scripted and specific policies for dealing with sensitive cases.
In a statement 1s Credit said it has an ongoing dialog with the OFT and will continue to make improvements.
Ray Watson, OFT director for consumer credit, said "The OFT welcomes the constructive approach that 1st Credit has taken in responding to concerns about its activites."
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