Oakbrook Finance Ltd - Financial Steps

Oakbrook Finance Limited, a UK-based financial services company, provided unsecured consumer loans and credit cards to individuals who often found themselves underserved by mainstream lenders. Operating under brands like Likely Loans and Oakbrook, the company positioned itself as offering responsible and transparent lending solutions.

Historically, Oakbrook Finance focused on leveraging data and technology to assess creditworthiness and personalize loan offerings. Their underwriting process aimed to identify individuals with limited credit history or those who had experienced past financial difficulties, offering them a potential pathway to access credit and rebuild their financial profile. This approach, while catering to a specific market segment, also carried inherent risks associated with lending to higher-risk borrowers.

The company’s loan products typically ranged from smaller personal loans to larger sums intended for debt consolidation or significant purchases. Credit card offerings provided another avenue for consumers to manage their finances. Oakbrook Finance emphasized responsible lending practices, often highlighting its commitment to affordability checks and clear communication regarding loan terms and repayment schedules.

However, Oakbrook Finance faced significant challenges and scrutiny regarding its lending practices. The company was subject to a redress scheme after an investigation by the Financial Conduct Authority (FCA) identified concerns about its affordability assessments and the way it handled borrowers in financial difficulty. The FCA found that Oakbrook Finance did not always adequately assess whether customers could afford the loans they were being offered, leading to potential financial hardship for some borrowers.

The redress scheme involved compensating affected customers who had been potentially mis-sold loans or had suffered financial detriment due to the company’s lending practices. This had a substantial financial impact on Oakbrook Finance, ultimately contributing to its administration.

In 2020, Oakbrook Finance entered administration. Smith & Williamson LLP were appointed as administrators. The administration process aimed to maximize returns for creditors and manage the company’s assets and liabilities. The existing loan book was subsequently sold to other financial institutions.

The collapse of Oakbrook Finance highlights the complexities and risks associated with lending to underserved segments of the population. It underscores the importance of robust affordability assessments, responsible lending practices, and effective consumer protection measures within the financial services industry. The FCA’s intervention and the resulting redress scheme serve as a reminder of the regulatory oversight required to ensure that financial institutions act in the best interests of their customers, particularly those who may be vulnerable to financial exploitation.