The OFT has imposed requirements on The Bankruptcy Protection Fund, Consolidated Finance and Alpha Mortgages Manchester, to improve their practices when offering bankruptcy annulment services. The organisation conducted an investigation into the businesses and found that the three companies had “not been transparent in their dealings with customers and failed to adequately outline the risks involved”. The OFT also claimed the trio misled customers about cancellation rights and neglected one customer’s mental capacity.
The companies have been told to: explain the commercial nature and costs of its services; give customers clear and accurate information about the short-term loan offered; informaning them that obtaining a mortgage or re-mortgage is not guaranteed; and reveal that the consumers property could be repossessed in the event of non-payment of the loan.
Ray Watson, director of the OFT's consumer credit group, said: “Bankrupt people are in a vulnerable position. They need to be given full and clear information about any offer that is made to them. These requirements make it clear that the OFT expects full transparency and fairness from this sector, to make sure that consumers are not misled and do not find themselves placed in a worse financial situation.”