Celebrity-endorsed cash companies branded 'legal loan sharks' face curbs

A clampdown on controversial payday lenders is due this week by the Office of Fair Trading, with dozens expected to be reprimanded for their behaviour. A report by the watchdog after a year-long investigation will centre on fears that many customers taking these expensive, short-term, unsecured loans of up to 4,000 per cent APR cannot repay them. The OFT is expected to tackle the practice of ‘rolling over’ debt into larger loans, which means problems can spiral out of control. The market has exploded in the past four years as mainstream banks rein in lending. Payday loan specialists – often criticised as ‘legal loan sharks’ – have been quick to fill the vacuum. The OFT found that the majority of firms it visited during its investigation breached guidelines. Some of the practices that were uncovered have already led to formal investigations into several individual companies. It is not yet clear whether the OFT plans to ‘name and shame’ firms, but they are thought to include many household names.....Read more here