OFT warns credit industry not to take court action against consumers outside their home jurisdiction
The OFT has imposed requirements on a national retail finance company and issued a warning to the credit industry that taking court action against consumers outside their home jurisdiction is unacceptable.
An OFT investigation into Creation Consumer Finance demonstrated that a firm of solicitors acting on behalf of the company was issuing proceedings against Scottish debtors in English courts.
The OFT regards this practice as unfair because the unfamiliar law and procedure involved in a court claim in a different jurisdiction, and any associated travel costs, may deter consumers from defending such action.
The OFT is warning all consumer credit licence holders that taking action or threatening to take action against consumers in a court outside their home jurisdiction is a breach of the OFT’s Debt Collection Guidance. Where there is evidence that businesses are engaging in such behaviour, the OFT will take action to ensure compliance with its guidance so that there is no repetition of the practice.
The requirements imposed on Creation Consumer Finance also stated that the law of the consumer’s domicile shall govern any agreements.
Lenders will need to take this guidance on board when dealing with non-English based consumers.
Please see link to the OFT website .
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