Local authorities should block access to payday loan websites from council computers in a bid to protect vulnerable residents, according to a Willaston and Rope Ward Councillor. Brian Silvester is calling for access to payday loans. Yesterday, Citizens Advice issued a warning over payday lenders’ after finding three out of four people struggled to repay the loan. It is urging the OFT to immediately ban these lenders, saying they are causing real harm to borrowers. http://www.localgov.co.uk/index.cfm?method=news.detail&id=109944
The OFT’s excuse for its ‘ineffective’ crackdown on payday loans companies is pretty feeble. And what’s so alarming, is the speed at which industry grows up around the OFT’s tardiness. http://blogs.channel4.com/siobhan-kennedy/2013/05/31/oft-offers-feeble-excuses-mps-payday-loan-failures/
Friday 31 May 2013 UK
Payday loan regulator ‘lacks power’ to tackle predators
The Office of Fair Trading admits it “lacks regulatory powers” as it is slammed by MPs for failing to protect consumers from “predatory” lenders.
OFT hits back at PAC criticism over payday loans (Image: Getty)
A damning report by a powerful committee of MPs said the OFT had been “ineffective and timid in the extreme” in tackling the “shabby end” of the credit market, which is costing borrowers £450m a year.
The public accounts committee (PAC) criticised the OFT for not taking tougher action.
But the OFT hit back, claiming it was taking “strong, targeted action” in the areas of greatest risk to consumers but is held back by law.
An OFT spokesman said: “We are disappointed that the committee has not acknowledged the constraints of the legislation under which the OFT currently operates which… was not designed to provide a supervisory approach to addressing potential consumer harm.
“As the National Audit Office recognised, these constraints include a lack of regulatory powers and the ability to impose fines only in very limited circumstances.”
In March the OFT began rolling out regulation requirements to 50 payday lenders, giving them a 12-week deadline to prove their good behaviour or risk losing their licences to trade, which the MPs said was an “encouraging” step. http://www.channel4.com/news/payday-loan-regulator-lacks-power-to-tackle-predators
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