The Office of Fair Trading (OFT) has launched an review into payday loans.
The OFT will demeanour into allegations that payday personal loan lenders chase on those who are vulnerable, such as jobseekers and those contingent on benefits. The watchdog will examine claims that these loan companies are lending irresponsibly by not carrying out adequate financial checks before similar loans.
The new OFT beginning will see 50 payday loan lenders investigated, nonetheless they have not been named. Those found to be handling irresponsibly could be sealed down, a Independent reports.
Payday lenders will be questioned about either borrowers who have problem assembly repayments are treated fairly. The emanate of ‘rolling over’ personal loans will also be addressed.
David Fisher, a OFT’s executive of consumer credit, said, “We are endangered that some payday lenders are holding advantage of people in financial difficulty.”
The exploration comes following countless calls from consumer rights groups and newspapers for payday loans to be investigated. Labour MP Stella Creasy has led a debate to examine a industry. The Independent quotes her as saying, “I’m blissful a OFT has finally certified there’s a problem, though a review won’t solve things.We need stronger regulations. The stream law is too weak.”
She added, “The indicate with a payday loans attention is that there is so most income to be done that as shortly as we moment down on one brute firm, another simply takes a place.”