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OFT gets tough with payday lenders

OFT gets tough with payday lenders

Category: Loans

Updated: 09/10/2012
First Published: 09/10/2012

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The Office of Fair Trading (OFT) investigated sixty-eight payday loan companies between January and May this year, as part of its pledge to crackdown on 'rogue' lenders.

In contrast to last year, where just one payday loan lender was investigated, the OFT stated that it has conducted thorough doorstep checks on lenders to ensure they are legally compliant.

The payday loan industry has boomed over the past couple of years, as a growing number of consumers seek short-term, quick credit.

Despite its popularity, this particular area of the market has attracted a wealth of controversy due to high interest rates and aggressive sales methods.

There have also been numerous calls for the market to be regulated in order to protect consumers.

Director of Consumer Credit at the OFT, David Fisher, said: "The payday sector has grown considerably since the OFT's high cost credit review in 2010.

"This, combined with the current tough economic conditions makes it the right time for us to review the industry and improve protection for consumers."

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