Trading Standards have been found to be taking cash from a loans firm at the subject of consumer complaints.
The payments were uncovered by a Radio 5 Live investigation, following customer reports that money had been wrongly debited from their accounts by Leeds-based broker SGE Loans.
The BBC reports that West Yorkshire Trading Standards (WYTS) received consultancy payments from online loans broker SGE Loans in exchange for regulatory advice. WYTS says such partnerships are necessary because of budget cuts but that its integrity remains unaffected.
But some customers claim that SGE Loans has debited their bank accounts without consent - a claim SGE Loans denies. Yet when two customers contacted the 5 Live Investigates programme to report that sums of £79.99 and £69.99 had been debited from their accounts without authorisation, SGE only agreed to refund the money when the BBC contacted the firm on the customers' behalf.
SGE Loans chief executive Sally Hill told the BBC that SGE Loans did not debit money from customers' accounts without authorisation. In a written response, she said that SGE Loans had never refused to refund money to a customer who had cancelled within the 14 day cooling-off period, if the company's service had not been used.
West Yorkshire Trading Standards confirmed, in several instances, recordings of customer calls revealed that some SGE Loans staff had not fully explained the terms of its business and did not warn customers they were liable to pay an upfront fee, which could be refunded after a 14 day cooling-off period.
WYTS says SGE Loans subsequently took disciplinary action and retrained staff who made such mistakes.
According to the BBC, WYTS says it has received over £88,000 ($137,500) since April 2011 from a total of 47 companies with which it has similar partnerships. It confirmed that it only started charging SGE Loans for its detailed advice in that month, but would not reveal the precise sum it had received from SGE Loans, citing commercial confidentiality.
Leeds-based SGE Loans has what is called a Primary Authority Partnership with West Yorkshire Trading Standards, which means that the branch deals with complaints made against the company from across the UK.
The company also has a commercial contract with WYTS, paying for advice about legal and regulatory issues.