OFT investigate payday loan companies
The Office of Fair Trading (OFT) are going after two loan sharks payday loan companies following a thoroughly fascinating investigation by Which! Money.
The consumer group have, according to themselves, uncovered “widespread” poor practice in the sector. Like what? Things like breaches of the Consumer Credit Act, poor privacy provisions and inflated interest rates.
So who should you be looking out for apart from... well... all of them? Of the firms reported, the oddly named Paydaykong.com appear to be operating without a valid Consumer Credit Licence and Swiftmoney.co.uk failed to show the APR for its loans anywhere on its website.
Which! Money's investigations are also sniffing around Casheuronet UK (who operate Quick-payday.co.uk) and Quickquid.co.uk after the consumer group received dozens of unsolicited third-party emails and phone calls following a researcher's application, which implied that his details had been sold on.
There are also reported examples of potentially misleading claims about APRs, customers being encouraged to borrow more money than necessary and consumers being urged to roll-over existing loans for several months. All poor form really.
There's also talk of several firms not being up to scratch with website security, with one provider allegedly asking customers to enter bank details on an unsecured page.
Which! executive director, Richard Lloyd, says: “Payday loans might seem like a good solution for people whose money won’t stretch to the end of the month, but they should be treated as an absolute last resort.”
“With increasingly squeezed household budgets, more people are taking out payday loans so it’s vital that regulators keep a close eye on providers and deal firmly with any lenders breaking the rules.”