Online payday loans company MCO Capital Limited has had its consumer credit licence revoked by the Office of Fair Trading.
The lender is no longer permitted to make regulated loans to UK consumers, with effect from Tuesday this week.
The OFT found in August 2012 that MCO had failed to put in place adequate identity checks for loan applicants, leading to MCO being targeted by fraudsters who used the personal details of over 7,000 individuals to apply successfully for loans totalling millions of pounds.
MCO also allegedly engaged in unfair business practices by contacting people who it was aware may not have taken out the loans, asking unequivocally for repayment, and ignored OFT's requests to cease doing so. MCO also lacked the necessary skills, knowledge and experience to run a consumer credit business, according to the OFT.
The lender appealed against the OFT's decision to revoke its Consumer Credit Licence, but withdrew its appeal this week. It is still appealing againsts a £544,505 fine for breaches of the Money Laundering Regulations 2007.
OFT Director of Credit David Fisher said: "Removing MCO's licence is a timely reminder that payday and other lenders risk losing their licences if they engage in unfair business practices. The way MCO chased consumers for debts they did not owe was unacceptable and caused unnecessary distress to many people."
Consumers who are pursued by a lender for a debt they do not owe should write to the lender and, where appropriate, the debt collection agency, making it clear why payment is being refused. More information is contained in this Consumer Fact Sheet and Advice Guide, produced by the Credit Services Association.
