The Office of Fair Trading has undertaken a formal review of compliance by payday lenders with its relevant legislation and guidance, in particular the Irresponsible Lending Guidance.
Fifty leading payday lenders, accounting for 90 per cent of the market, were each given 12 weeks by the OFT to prove they have addressed areas of non-compliance identified during the payday lending review.
In addition to the 50 leading lenders, and since the OFT published the final payday review report in March:
We will analyse the evidence of compliance sent to us by lenders. If we still have concerns that they are not compliant, we have a range of options open to us. These include taking steps to remove their licence, imposing legal requirements on them to change certain aspects of their behaviour or, if we have evidence of imminent harm to consumers, suspending their licence immediately.
On 27 June 2013, the OFT announced its final decision to refer the market for payday lending in the UK to the Competition Commission (CC) for a market investigation. Having considered responses to the consultation on its provisional decision, the OFT remained of the view that there were reasonable grounds for suspecting that features of the payday lending market were preventing, restricting or distorting competition. For more information, see the MIR case page.
The OFT has published the final report of its compliance review of the payday lending sector. The review has found evidence of widespread non-compliance with the law and guidance across the sector and at every stage in the life-cycle of loans.
The report sets out our action plan to tackle deep-rooted problems in the market. This includes:
The OFT's extensive review of the payday lending sector was prompted in part by concerns that some payday lenders are taking advantage of people in financial difficulty.
The review investigated levels of compliance with the Consumer Credit Act and the extent to which businesses in the payday sector are meeting the standards set out in the ILG.
The review involved inspections of 50 major payday lending companies including compliance work with trade associations and surveys of industry and consumer bodies. Leading up to the review the OFT conducted a sweep of over 50 payday lending websites and wrote to the main trade bodies outlining areas where the OFT considers advertising standards need to be improved.
On 20 November 2012, the OFT published an interim report on the payday lending compliance review.
The ILG was issued in March 2010 and updated in February 2011 and sets out the standards expected of licensees providing consumer credit, including payday lenders.
The OFT gathers information from consumers regarding their experiences with payday lenders. If you would like to provide us with details of your experiences, please complete and return the complaint form below.
Please note you are only able to save changes to the complaint form if you have the full version of Adobe. If you do not have the full version, please print the document with your changes or print the document and complete it by hand.
The information you provide will be used to assist the OFT's ongoing monitoring of business practices in the payday lending sector.
Team leader: Marie Whitley (0207 211 8287 firstname.lastname@example.org)
Project director: Gordon Ramsay (0207 211 8420 email@example.com)
Senior responsible officer: David Fisher (0207 211 5890 firstname.lastname@example.org)
Any media enquiries should be directed to a member of our Press Office.
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