OFT has published the results of its review of payday lenders. It uncovered evidence of widespread irresponsible lending and failure to comply with appropriate standards. It has now given the leading 50 firms, which account for 90% of the payday market, 12 weeks within which they must change their business practices. If they do not, they will lose their licences. Among the failings OFT uncovered were:
- failure to assess affordability;
- not explaining how payments would be collected;
- aggressive debt collection practices; and
- not using forbearance when dealing with borrowers in financial difficulties.
OFT also intends to refer the market to the Competition Commission. (Source: OFT Takes Action Against Payday Lenders)