Since the Office of Fair Trading (OFT) announced the conclusion of its investigation into the debt management sector in 2010, ninety firms have left the industry, according to the latest statistics.
In an update to its annual report published in October, the OFT revealed that as many as ninety firms have been either refused permission to trade or stripped of their licence, a much greater number than previously anticipated.
In September 2010, the OFT told the debt management sector that it must clean up its act after it published the results of its compliance review into the industry, which uncovered a raft of poor practices.
At the time, 129 debt management firms were given a stern warning over their conduct. They were told to clean up their act or face formal action, including the possibility of being stripped of their licence.
By October last year, twelve months after the initial report was published, sixty debt management firms had left the industry, but in the six months since, thirty more were kicked out. The OFT has taken a tough approach to offenders, refusing to issue consumer credit licences to those who do not meet strict criteria and stripping firms of their right to trade if they fail to comply.
Of the firms that had their licences forcibly removed by the OFT, rather than agreeing to cease trading, eleven appealed against the decision. However, the OFT has said that the tribunal upheld the OFT decision in all eleven cases and refused to reinstate any of the licences.
The OFT has said it has continued to apply the rules stringently and in the last year alone it has pursued 106 cases in the consumer credit industry, including some in the debt management sector, as well as others from sub-prime lending brokerages.