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Payday loan inquiry launched

The Office of Fair Trading has launched an investigation into payday loans. Officials are writing to all 240 payday firms, warning them over the use of "aggressive debt collection" methods.

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OFT highlights payday concerns in new report

The actions are set out in a progress report published as part of the Office of Fair Trading's compliance review of the payday lending sector. It highlights concerns about:

  • The adequacy of checks made by some lenders on whether loans will be affordable for borrowers.
  • The proportion of loans that are not repaid on time.
  • The frequency with which some lenders roll over or refinance loans.
  • The lack of forbearance shown by some lenders when borrowers get into financial difficulty.
  • Debt collection practices.

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