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107/12 16 November 2012



The OFT has decided to revoke the credit licence of First Step Finance Limited (FSF), a large debt resolution company based in Stockport. The OFT has reached this decision because, among other matters, the company:

  • was not sufficiently transparent when describing its services, including in sales calls
  • failed to comply with OFT Debt Management Guidance, the Consumer Credit Act and other consumer legislation
  • demonstrated a lack of integrity.

FSF's business model relies in part upon negotiating 'full and final settlements' for its clients. Under this model consumers make regular payments to FSF and build up a fund, which the company then uses to make offers to creditors in an attempt to settle and repay their debts. The OFT found that FSF's advertising, marketing and other information failed adequately to highlight the risks associated with this business model. For example, FSF did not adequately inform consumers that there could be a long period of time when their debt would not substantially be reduced, potentially creating further arrears.

FSF also failed adequately to inform consumers how its services operated, or the costs involved, so that customers might not appreciate the possible financial consequences should they exit a scheme early. Leaving a scheme early could mean that the customer's debt was not effectively reduced, with the associated risk of further arrears and charges. Elements of FSF's advertising and pre-contract information also failed to comply with OFT Debt Management Guidance, including the principle that advice should be given in the best interests of the consumer. An overall theme of the OFT's Debt Management guidance is for businesses to be transparent so that consumers have all the information necessary to make informed decisions about the most appropriate debt solutions for them given their financial circumstances. The OFT reviewed the debt management sector in 2010 and subsequent intervention has resulted in over 100 businesses exiting (or being refused entry to) the debt management market.


David Fisher, OFT Director of Consumer Credit, said:


'People in debt are often vulnerable and are entitled to expect the highest levels of integrity and transparency from debt management businesses. First Step Finance did not meet the OFT's exacting standards or its legal obligations so we are removing their licence.'


FSF can appeal the determination. Until such time as the appeal process is at an end, FSF remain licensed to engage in credit activities by the OFT.




  1. The Consumer Credit Act 1974 places a duty on the OFT to ensure that licences are only given to and retained by those who are fit to hold them.
  2. FSF may appeal the OFT's decision to revoke its licence to the First-tier Tribunal (Consumer Credit). Until such time as the appeal process is at an end, FSF remain licensed to engage in credit activities by the OFT.
  3. The debt solution offered by FSF uses a hybrid of claims management, debt counselling and debt adjusting to reduce the debt whilst funds build up in the client account. Once a significant enough sum has built up in the client account, the business then uses this sum to negotiate full and final settlements with those creditors whose debts it believes are enforceable. This type of debt solution is referred to in the industry as a 'full and final settlement plan.'

Link: http://www.oft.gov.uk/news-and-updates/press/2012/107-12

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Re: First step Finance

Sorry for not being on here for a while but I have been busy both with work etc and with some stuff related to this company.

I don't really know where to start with this and the fiasco they have caused, just to say (and this is just my personal advice from my experience of the service I received from FSF) DO NOT PAY ANY MORE MONEY INTO THIS COMPANY, STOP YOUR PAYMENTS AND CANCEL YOUR PLAN.


If you feel they have not fulfilled their contractual obligations or haven't done for you what you believed they said would do when you started the plan then go to the
and register a complaint and make a complaint to the OFT, which is what I did in 2012.


They have an appeal pending with the OFT regarding their credit licence, see link below




When I cancelled my account in Nov 2011 it was because I had realised that I had made a mistake in using them. I felt they had not done anything they said they would do, that they had added extra charges onto my account (which were not in the original signed document) and I was also gaining the knowledge of how to do things myself.


When I cancelled I asked them to return what was left in my 'pot' and I was prepared to walk away and lose 50% of what I had paid in (???!!) for my 'stupidity' (it transpired they had taken this amount in fees I knew nothing about)


I was not fully aware even at this cancellation stage of just how inept, greedy and rubbish they were but I was about to find out.


Even though I had specifically stated I was 'cancelling' the plan and that it wasn't a complaint, THEY decided to treat it as one. They refused to return my monies, which they have to by law and which I specifically asked them to do several times and then made payments to my creditors so they could claim the fees on them.


They lied to me and the quality of their reply letters to me made me despair of how they had been dealing (or not) with my finances.


They told me they had destroyed all my data, they twisted things around, tried to confuse me, refused to send me info I requested with a
etc. and generally behaved with disregard for anything I tried to do.


I was absolutely disgusted at their treatment of me and although I had been warned this is what would happen I was still shocked and upset.


Their final report (in response to the complaint I hadn't made) was miss-spelt, inaccurate, full of untruths, the figures/amounts were incorrect and it had obviously 'knocked out' by someone who knew nothing of my case just to get me off their back.


They treated it as a complaint so I then made complaints to the FOS and the OFT. I do also believe they broke rules to do with data protection.


In the January after I cancelled (and after they said they couldn't talk to me as they didn't know who I was as they had destroyed all my data), they send me an email offering the services of a payday loan
company called Pickaday Payday loans, which they said was a preferred supplier, see below.


Dear First Step Finance member.


After speaking to our clients several times in the course of our service, it has become apparent that many of you are seeking advice on best companies. Things like which utility company to go with or which bank to bank with or which mobile telephone packages or internet etc.


Because of this we are going to start a
list. This is a list that First Step Finance considers to be a good supplier and where necessary have negotiated a cheaper rate.


The first thing we investigated, and only because of demand, were
payday loans


It came to our attention that 61% of First Step Finance customers, contrary to our advice, have used or continue to use pay day loan facilities.


Whilst not condoning, encouraging or advising our clients to use these facilities we do recognise that there are occasions where clients find such facilities essential.


We understand that the average
or fee for a payday loan seems to be around £25-£29 per £100 borrowed, sometimes with extra charges of £5 and upwards.


We would like to make it very clear that our advice is never to extend your debt liability through loans or other facilities, while you are in a debt reduction plan.


Nevertheless, where clients absolutely cannot do without such an emergency facility we have negotiated a special arrangement with a short term lender called
Pickapayday Loans Ltd.
They have agreed a reduced rate for clients of First Step Finance of £22 per hundred borrowed.


Please note, First Step Finance receive no commission or fees from
Pickapayday Loans Ltd


If you are interested and need funds for a genuine emergency click on the link below and use the
promotional code
to gain your discount.






After looking at Company House records I saw it had connections with the directors of FSF. I felt this was a huge conflict of interest and not really something a debt adjustment company (as they now describe themselves) should be offering.


One month ago they called me out of the blue and have refunded me the full amount of money I have paid them. As they had already paid nearly half of this to my creditors it has cost them 3 times more than if they had just behaved as they should when I originally cancelled.


I am guessing they do not want any outstanding complaints with the FOS whilst their appeal is pending with OFT, hence their willingness to pay out. I know Lord Tiger Putin had a huge fight on his hands previously and despite my case having a good outcome now I cannot say how much stress and hardship this company has caused. I regret the day I ever made contact with them but I was desperate and panicking. I am usually the kind of person who believes if 'something sounds too good to be true' it is but I made a bad judgement.

PS Without the help of Lord Tiger and a few other people on here I couldn't have dealt with all this.

Edited by ims21

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I orginally posted the above on the other FSF thread but thought I would put it on here as when you Google FSF it leads to this thread.

They have now relinquished their licence to the OFT and are trying to sell the company. The staff were told last Wednesday.


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