Mar 13
The Office of Fair Trading has announced that it is going to investigate 50 of the top payday lenders to make sure that proper trading standards are met. Over the past year there has been quite a campaign against payday loan companies amid allegations that many of these payday lenders or brokers take advantage of those experiencing financial hardship.
Payday loans are short term loans of anywhere between ?80 and ?1000 but the interest rates on these loans is often extremely high. If the loan is not payed back in time there are usually extremely expensive penalty fees which must be paid. Some lenders also allow loans to roll over into another month and so the debt simply gets bigger and bigger.
The OFT intends to make sure that lenders perform proper credit checks before lending to ensure that a borrower is likely to be able to pay back the loan. They will also ensure that those targeted for these sort of loans are suitable and not those who are unlikely to be able to pay a loan back.? The OFT will also investigate to what extent loans are rolled over and what charges are incurred through doing this.
Despite the review of 50 payday loan companies members of the public and anti payday loan campaigners feel that the OFT and the government are not going far enough. Labour MP, Stella Creasy who has campaigned against payday loans for many years stated,
?It is the premise that there a few bad apples that I have a problem with ? it is the industry as a whole and how it works that causes consumer detriment. As soon as you close down one company, another one will spring up in its place,?
she said.
Source: http://www.paydayloanspaydayloans.co.uk/news/?p=121
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