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
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