The Office of Fair Trading has launched a review of the payday loan sector due to the increasing concerns that some are taking advantage of those who can’t afford to pay them back which in turn is increasing the money owed through interest costs.
The four key issues that they will be looking at are:
• Companies giving loans without checking whether the applicant can repay the loan. • Targeting particular groups of people who have unsuitable or unaffordable credit. • Continuing loans so that the charges roll over escalating the costs further and making the loans un-affordable.
• Treating borrowers who get into financial difficulty un-fairly.
This review will include on-site inspections of 50 major payday lenders and surveys of industry and consumer organisations. The OFT have already inspected over 50 payday lending websites and written to the relevant trade bodies outlining improvements that can be made towards their advertising standards.
If you require any further advice about payday lenders please contact Trading Standards on 0345 60 80 197