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The trading watchdog will announce next Thursday whether it plans to refer payday lenders for a full-blown investigation by the Competition Commission.
The Office of Fair Trading (OFT) previously uncovered evidence of "widespread irresponsible lending" and gave the leading 50 payday lenders, accounting for 90pc of the market, a 12-week deadline to prove they were up to scratch or risk being put out of business. The watchdog published a damning report into the sector in March and proposed to refer the industry to the Commission, which has strong powers to ban or limit products and shake up whole markets. The OFT obtained information from all 240 lenders in the market in a year-long probe into the £2bn payday sector, including spot checks on household names such as Wonga. The review said particular problem areas included lenders failing to adequately assess affordability before lending, failing to explain properly how payments will be collected and aggressive debt collection practices. Of the 50 lenders the OFT wrote to, two have surrendered their licences and one has left the payday sector.....Read more here
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Online lender Wonga has dropped its appeal against an Office of Fair Trading (OFT) decision to impose requirements on its debt collection practices. The requirements issued by the OFT stated that Wonga “must not allege that a customer has, or may have, engaged in criminal conduct or refer to the consequences of such conduct”. It also set out that the lender must not “state that a customer should not be in debt if the customer has a certain employment status or for any other reason”....Read more here