The Office of Fair Trading (OFT) has issued a warning to credit companies regarding the practice of taking court action against consumers outside their home jurisdiction. The move comes following the OFT’s imposition of requirements on Creation Consumer Finance Ltd (CCF), who are a major retail finance company, for carrying out this type of action. CCF provide point of sale finance facilities through major retailers, home improvement suppliers and motor finance dealers, revealed that a firm of solicitors acting on behalf of the company was issuing proceedings against Scottish debtors in English courts.  According to the OFT this is unreasonable as the consumer is exposed to unfamiliar legal systems as well as high travel costs. In cases such as these the consumer may be deterred from defending the action.

The OFT has suggested that such action is a breach of the OFT's Debt Collection Guidance.

Ray Watson, OFT Director for Consumer Credit, said:

'Issuing proceedings in a different jurisdiction is clearly unacceptable and lenders should take heed that the OFT will act to prevent this practice. Lenders must also be aware that they are fully responsible for the actions of third parties acting on their behalf, and must ensure those third parties do not breach our guidance. Creation Consumer Finance has taken swift action to end the practice and has implemented more stringent procedures for appointing and monitoring solicitors acting on its behalf. We have imposed these requirements in order to ensure that the practice is not repeated.'