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Advisers at the Association of Finance Brokers annual dinner last week were told those already recommending secured credit to sub-prime borrowers should not notice much of a difference when it came to renewing their license to undertake such business.

Philip Collins, chairman of the Office of Fair Trading, said changes to consumer credit legislation meant his organisation could reshape the way it regulated finance brokers allowing them to focus more on intermediaries doing higher risk deals.

He said the intermediaries arranging secured loans for sub-prime borrowers were not deemed to be higher risk, it was the type of clients they worked with that fell into this category.

However the nature of the clients these intermediaries came into contact with meant the advisers would have to be more closely scrutinised if they were to obtain a licence to recommend such deals, Mr Collins told AFB members gathered at Drapers' Hall in London.

Mr Collins said: "What this means for those who wish to be licensed for these high risk activities is we will expect to see greater proof of skills, the processes undertaken by these individuals and details of their past experience."

Advisers already arranging secured loans for sub-prime customers were told the OFT would not expect them to produce this information until it came to renewing their license.

The amount of these types of deals arranged and the number that had run into difficulty would be considered when handing out renewed licenses, Mr Collins said.

However once the renewed license was handed out, Mr Collins said finance brokers should not expect any further requirements placed upon them unless complaints were made against them.

If complaints were made, Mr Collins said intermediaries could expect the OFT to engage with them again.

Mr Collins said: "You should have nothing to fear. I am sure the Association of Finance Brokers offers appropriate training in that area."

Robert Sinclair, director of the Association of Finance Brokers, said the OFT recognised it shared a common objective with the trade association, making sure consumers made informed choices.

He said: "We will engage with the OFT on how to manage risk effectively."

Mr Collins also called for AFB members to talk to the OFT about what they considered to be irresponsible lending practices.

He said the OFT had issued guidance on irresponsible lending in the past but he felt more clarity for both businesses and consumers was required.