Payday loans industry is, according to charity, 'out of control'

28 May 2013

stock_payday_loans Citizens Advice has called for "tough and immediate action" against payday lenders after 780 cases were reported to them between November 2012 and May 2013.

The Office of Fair Trading is looking at the industry and will be closing companies down if their practices are not up to standards. A decision is expected next month.

Citizens Advice wants the OFT to immediately ban some payday lenders who they say are causing harm to borrowers. They've found that people where being chased for loans they had not taken out and customers were being "hounded" at home to shame them into paying up.

Gillian Guy, Citizens Advice chief executive, described the payday loan industry as "out of control", adding: "It is vital that, following the investigation, the OFT takes swift action to protect consumers from the harm caused by these unscrupulous lenders."

The charity have looked at the feedback from 2,000 payday loans, and they found that in almost 9 out of 10 cases, borrowers weren't even asked to show evidence of being able to afford loans. Three quarters said that they had struggled to repay the loan and 84% of people with repayment problems were not offered the chance to have their interest and charges frozen.

An OFT spokesman said: "Of the 50 payday lenders that were inspected during the compliance review, 48 have confirmed that they will provide the OFT with proof that they are fully compliant, while two have surrendered their licences. The OFT has also announced that it has formal investigations open into the practices of three payday lenders and, in addition, three payday lenders have also had their licences revoked since the review of the sector in March."

TOPICS:   Debt   How To Guides


  • shiftynifty
    Is this from the stating the bleedin obvious institute again...considering most of them are tory donors they ain`t going to change any time soon...
  • badger
    If you're being harassed at home by somebody who claims to be there to recover a debt and has papers to "prove" it, the police will take it on face value and do nothing. These companies know that.
  • LancerVancer
    A large dog in a muzzle makes them think twice. A lot of baliffs are power mad the fucktards. FLEX wit da 'erb.
  • gaybrain
    What about gayday loans- borrow cash for only 5% per annum and repay it over whatever amount of time you want, but until it is repaid you have to be gay. That'd give the racist, ignorant, homophobic minimum wage cretins a reason to repay it quickly.
  • Inspector G.
    >they found that in almost 9 out of 10 cases, borrowers weren’t even asked to show evidence of being able to afford loans. 9 out of 10 people dont understand how credit searches work.
  • Shiftyniftysshadow
    Drunk loans appear to be doing well.......

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