15 Of 50 Payday Lenders To Quit Industry, Reports Trading Watchdog

Lurkerderp

Fifteen out of 50 payday lenders have thrown in the towel after being given a deadline by the trading watchdog to prove their business practices were up to scratch.

The Office of Fair Trading (OFT) said that 14 of the lenders have told it that they are leaving the payday market and another firm which failed to meet the deadline has said it is no longer operating as a lender.

The watchdog has been carrying out a probe into "deep-rooted" problems within the industry, such as lenders encouraging struggling borrowers to roll over loans they cannot afford so that the debt balloons. Last month it referred the sector for a full-blown investigation by the Competition Commission.
A 12-week cut-off point set by the OFT for 50 lenders, which account for 90% of the market, to show they are acting responsibly has now passed for all firms.

The OFT said that of the 14 lenders who are leaving the payday industry, three have surrendered their licences completely. The other 11 continue to operate in other areas where they still need a consumer credit licence to trade, such as pawnbroking or debt collection, for example.

The watchdog is going through reports provided by 46 firms in total, including the 11 firms who are pulling out of the payday market but still need to have a consumer credit licence.
Business Secretary Vince Cable said the OFT's action "clearly shows that tough enforcement is having a real effect".

He said: "Clearly there is more work to be done. I look to the remaining 35 lenders to take action to fix the problems in their own practices, or face up to further sanctions by regulators.
"Consumer Minister Jo Swinson recently met with the industry at a payday summit where I know she made progress developing priorities for the new Financial Conduct Authority in tackling payday lending problems."

Rest of the article is here - http://www.huffingtonpost.co.uk/2013/07/30/payday-lenders-quit-industry_n_3677105.html

redfragglebiker

Wonder which 15 are the ones to have thrown the towel in?

Cycrow

i bet its none of the big ones that you see advertised everywhere

DevCoder

The full OFT report (interesting annexes) is available here
http://www.oft.gov.uk/shared_oft/Credit/oft1481.pdf

theblagger

They all need to disappear from the industry

DevCoder

theblagger wrote: »

They all need to disappear from the industry

I agree although that would decimate the amount of posts to the loans and debt free wannabe sub forums.

Would substantially increase the posts to the Budgeting forum though which is a good thing.

lantanna

They'll be back in in some form - no doubt sub prime mortgages.

DevCoder

Not with the new liquidity requirements.

Anything would have less target audience then PDL to be honest.