From 6 April the fee to obtain or renew a licence will rise from £135 to £230 for sole traders and from £335 to £575 for other applicants, with the cost of amending details going up from £50 to £80.
The OFT blamed the fee increase on the need to recoup costs incurred due to the significant changes which were implemented as a result of the revamped Consumer Credit Act, which it claimed would result in better consumer protection.
Under the reforms, the OFT will be able to operate a full redress scheme for consumers, allowing them to place requirements on any aspect of a firm’s behaviour which they are dissatisfied with and potentially fining firms up to £50,000 for non-compliance.
Licences will also be issued with an indefinite timescale to conduct business, although holders will have to renew permission every five years and the OFT has the power to revoke at any time.
Steve Walker, managing director at Promise Finance, insisted that the industry must see noticeable changes in the OFT’s behaviour to justify the increase.
He explained: “In the grand scheme of things, it is not a huge amount of cash so I don’t think we should be complaining about it. However, will the OFT now start clamping down on things like financial promotions, which it has failed to do in the past? Basically, we need to see more from the OFT now and if it results in better treatment for customers, it has to be a good thing.”
