- 4 updates
Payday lenders are not doing everything they can to make sure they lend responsibly, the Citizens Advice Bureau warned.
Russell Hamblin-Boone from the Consumer Finance Association, which represents payday lenders said he did not believe that it was the "activities of the larger lenders" he represented.
He said: "We've got standards in place which go over and beyond what our legal requirements are to make sure that we're lending to people responsibly, that we're lending to people who can pay back and that we're making sure we are treating people fairly."
The Office of Fair Trading said it has received confirmation from 48 out of 50 lenders that they intend to prove to the regulator that they are acting within the rules.
It comes as a charity has warned that "out of control" lenders are failing to act responsibly. An OFT spokesman said:
Citizens Advice said the Office for Fait Trading (OFT) must take "tough and immediate action" on payday lenders following a 12-week deadline to prove their good behaviour.
Analysis from 780 cases reported to Citizens Advice between November 2012 and May this year found:
- People were being chased for loans they had never taken out
- Customers were being "hounded" at their home to shame them into paying up
- Struggling borrowers' bank accounts were being drained of cash "without any warning" by lenders using a type of payment agreement called a continuous payment authority (CPA)
- In some cases lenders also took more than they were owed and refused to give a refund
A debt advice charity has warned that "out of control" payday lenders are failing to act responsibly and are hounding people for money.
In recent months, Citizens Advice has seen lending to people who were aged under 18, people with mental health issues or people who were drunk when they took out the loan.
It comes as Britain's biggest payday lenders are under threat of being put out of action if they fail to prove to the Office of Fair Trading (OFT) that their practices are up to scratch.
In June, the OFT is expected to announce whether it will refer the payday market for an investigation by the Competition Commission.