It follows the recent OFT payday lending review report, which uncovered evidence of widespread unfair business practices in the sector.
In August 2012, the OFT found that MCO had failed to put in place adequate identity checks for loan applicants.
It is thought that this failure led 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.
The OFT also found that MCO had engaged in unfair business practices by writing to people who it was aware may not have taken out loans, asking unequivocally for repayment. MCO ignored OFT requests to stop this practice.
Additionally, the OFT found that MCO lacked the necessary skills, knowledge and experience to run a consumer credit business.
MCO appealed the OFT’s decision, but it withdrew its appeal. MCO is continuing to appeal the OFT’s decision to impose a financial penalty of £544,505 for breaches of the Money Laundering Regulations 2007.
David Fisher, Director of Credit at the OFT, says that removing MCO’s licence was 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.”