A loans company at the subject of countless consumer complaints could soon be shut down by the Office of Fair Trading.
Yes Loans, based in south Wales, has been hitting applicants with an upfront fee yet not supplying the credit they have applied for, or charging a higher rate than expected.
According to a 5 Live Investigates report last night, the OFT will not say why it is "minded to revoke" its licence but an independent OFT adjudicator will make the final decision, which is subject to appeal.
Yes Loans claims to process more than 50,000 personal loan applications a month. It says it offers unsecured loans of between £250 and £25,000, for a typical arrangement fee of £69.50.
Service shake up
Following a previous OFT investigation into its business practices, the firm had requirements placed on its consumer credit licence in 2009. The regulator ordered Yes Loans to have a clear and timely refund practice, that staff in its call centres must stick to approved scripts, and that the company must make it clear to customers that it is a broker, not a direct lender.
Duped into paying fee
The common cause of complaint is where customers have paid an upfront fee on the understanding that they have been accepted for a loan. They are then told that they do not qualify for credit at all, or that they are offered it at a far higher rate than they had expected. Some customers say they have then experienced difficulty getting a refund.
The BBC has asked Yes Loans which lenders it has a relationship with, but the company says it will not release that information on grounds of commercial confidentiality.
In a statement to the BBC, Yes Loans said: "Every month Yes Loans receives and processes many thousands of new customer enquiries and personal loan applications. Our complaints rate is less than a quarter of one percent.
"Any complaint is regrettable, and we take all of them seriously, investigating them thoroughly and doing all we can to bring them to a satisfactory conclusion. We are very confident that the vast majority of our customers are happy with the service that we deliver to them."
It added that it was committed to responding to any concerns raised by the OFT and to working towards a solution. An independent OFT adjudicator will now consider representations from Yes Loans. If the adjudicator decides its consumer credit licence should be revoked, the company could appeal and continue trading throughout the process.
The company is not in any way connected to Y3S Loans - formerly named Yes Loans and Mortgages - of Cardiff.