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06/03/2013
Payday Lenders Risk Losing Licenses
The OFT is giving the leading 50 payday lenders, accounting for 90 per cent of the payday market, 12 weeks to change their business practices or risk losing their licences.
They uncovered evidence of widespread irresponsible lending and failure to comply with the standards required of them.
The OFT has also announced that, subject to consultation, it proposes to refer the payday lending market to the Competition Commission after it found evidence of deep-rooted problems in how lenders compete with each other.
The action was announced in the final report on the OFT's compliance review of the £2 billion payday lending sector. The review found evidence of problems throughout the lifecycle of payday loans, from advertising to debt collection, and across the sector, including by leading lenders that are members of established trade associations.
Particular areas of non-compliance included lenders failing to conduct adequate assessments of affordability before lending or before rolling over loans. Lenders failing to explain adequately how payments will be collected. Lenders using aggressive debt collection practices.
Lenders not treating borrowers in financial difficulty with forbearance.
Clive Maxwell, OFT Chief Executive, said: "We have found fundamental problems with the way the payday market works and widespread breaches of the law and regulations, causing misery and hardship for many borrowers. Payday lenders are earning up to half their revenue not from one-off loans, but from rolled over or re-financed deals where unexpected costs can rapidly mount up.
"We are proposing to refer this market to the Competition Commission, which has wider powers to get to heart of the problems in this market and to identify and impose lasting solutions that protect consumers.
"Irresponsible lending is not confined to a few rogue payday lenders - it is a problem across the sector. If we do not see rapid, significant improvements by the 50 lenders we inspected they risk their licences being removed. Payday lending is a top enforcement priority for the OFT."
(GK)
They uncovered evidence of widespread irresponsible lending and failure to comply with the standards required of them.
The OFT has also announced that, subject to consultation, it proposes to refer the payday lending market to the Competition Commission after it found evidence of deep-rooted problems in how lenders compete with each other.
The action was announced in the final report on the OFT's compliance review of the £2 billion payday lending sector. The review found evidence of problems throughout the lifecycle of payday loans, from advertising to debt collection, and across the sector, including by leading lenders that are members of established trade associations.
Particular areas of non-compliance included lenders failing to conduct adequate assessments of affordability before lending or before rolling over loans. Lenders failing to explain adequately how payments will be collected. Lenders using aggressive debt collection practices.
Lenders not treating borrowers in financial difficulty with forbearance.
Clive Maxwell, OFT Chief Executive, said: "We have found fundamental problems with the way the payday market works and widespread breaches of the law and regulations, causing misery and hardship for many borrowers. Payday lenders are earning up to half their revenue not from one-off loans, but from rolled over or re-financed deals where unexpected costs can rapidly mount up.
"We are proposing to refer this market to the Competition Commission, which has wider powers to get to heart of the problems in this market and to identify and impose lasting solutions that protect consumers.
"Irresponsible lending is not confined to a few rogue payday lenders - it is a problem across the sector. If we do not see rapid, significant improvements by the 50 lenders we inspected they risk their licences being removed. Payday lending is a top enforcement priority for the OFT."
(GK)
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20 November 2012
OFT Investigates Payday Lenders
The OFT has opened formal investigations into several payday lenders over aggressive debt collection practices. It is also today writing to all 240 payday lenders highlighting its emerging concerns over poor practices in the sector.
OFT Investigates Payday Lenders
The OFT has opened formal investigations into several payday lenders over aggressive debt collection practices. It is also today writing to all 240 payday lenders highlighting its emerging concerns over poor practices in the sector.
05 November 2013
Lewis Slams Payday Lenders
MoneySavingExpert.com creator Martin Lewis has told MPs payday lenders are "in danger of grooming a new generation to this type of borrowing". Mr Lewis joined other consumer groups, regulators and payday loan firms at a Business, Innovation and Skills Select Committee hearing into the industry this morning.
Lewis Slams Payday Lenders
MoneySavingExpert.com creator Martin Lewis has told MPs payday lenders are "in danger of grooming a new generation to this type of borrowing". Mr Lewis joined other consumer groups, regulators and payday loan firms at a Business, Innovation and Skills Select Committee hearing into the industry this morning.
28 March 2012
Football Fans Call On Clubs To Stop Running Payday Loan Adverts
Fans of 18 football clubs have come together to petition their respective clubs to stop carrying advertising by payday loan company Wonga on their websites. The group, lead by Northampton Town supporter Bob Ward and grandson Dan, are also encourage fans of more than 60 other clubs to do the same.
Football Fans Call On Clubs To Stop Running Payday Loan Adverts
Fans of 18 football clubs have come together to petition their respective clubs to stop carrying advertising by payday loan company Wonga on their websites. The group, lead by Northampton Town supporter Bob Ward and grandson Dan, are also encourage fans of more than 60 other clubs to do the same.
07 March 2012
Report Calls For Tighter Controls On Payday Loans
A report has recommended that lenders of payday loans should be forced to limit loans being ‘rolled-over’, stop letting customers switch lenders and to share customer information with other lenders.
Report Calls For Tighter Controls On Payday Loans
A report has recommended that lenders of payday loans should be forced to limit loans being ‘rolled-over’, stop letting customers switch lenders and to share customer information with other lenders.
15 February 2013
Citizens Advice Call For Immediate Suspension Of Payday Loan Co. Licenses
The Office of Fair Trading (OFT) are being urged to use new powers to immediately suspend the licences of four payday lenders, who Citizens Advice claim are "causing significant distress" to customers.
Citizens Advice Call For Immediate Suspension Of Payday Loan Co. Licenses
The Office of Fair Trading (OFT) are being urged to use new powers to immediately suspend the licences of four payday lenders, who Citizens Advice claim are "causing significant distress" to customers.
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