The Office of Fair Trading (OFT) has welcomed an interim Enforcement Order obtained by Birmingham Trading Standards against a controversial claims company.
Momentum Network Ltd claimed that it was able to ‘sell’ debt. The company would offer consumers the opportunity to sell their consumer credit debts for as little as £1, without the consent of the original creditor.
The Order, granted in Birmingham County Court, now prevents Momentum Network Ltd, trading as Credit Card Killer, and its owners, Mr and Mrs Basil Rankine, from engaging in the unfair commercial practice of ‘debt sale’.
Mr and Mrs Basil Rankine have also been banned from making misleading claims. In the past they have said that they can make consumers ‘debt free in 2 weeks by buying their debt for £1’.
They have also been prevented from carrying on ancillary credit business as defined in the Consumer Credit Act 1974.
Birmingham Trading Standards obtained the Order following an Illegal Money Lending Team investigation which revealed that the company’s activities were causing “significant detriment” to vulnerable consumers.
It has been estimated that customers of Momentum have paid over £1 million in up front fees for a ‘service’ which the OFT believes to be a scam.
Consumers have been warned not to deal with companies, or agents working on their behalf, that claim to be able to buy debts without the consent of the lender, as this is not legally possible.
The OFT added that businesses which suggest otherwise are making clearly misleading claims.
Consumers who ‘sell’ their debts to one of these businesses run the serious risk that they will still be liable for their original repayment obligations, lose the money they paid and continue to be subject to debt collection activity and negative credit scoring associated with the original debt.
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Tags: lender, Lending Team