Skip to main content

Uswitch.com calls on OFT to take tough action against payday lenders as new failings are exposed

Citizens Advice has today released new findings exposing the real extent of payday lenders’ failings. Michael Ossei, personal finance expert at Uswitch.com**, says:** “These findings highlight just how low some lenders will stoop, to squeeze as much as they can out of vulnerable consumers. Worrying numbers of people are being hung out to dry by payday loan companies at a time when they often need professional support to help them resolve their financial difficulties.

“With adverts popping up left, right and centre, it’s easy to see how so many people are turning to payday lenders when their bank says ‘no’ to more money. The promise of a fast fix of cash with minimal credit checks is all too tempting – especially to those who are struggling to obtain credit. But consumers need help, support and guidance rather than being led further into debt.

“Today’s findings leave no doubt that payday lenders are letting consumers down. Rather than putting their resources into adequate affordability checks, they are using persuasive advertising at every opportunity to get as many people signed up as possible. Unfortunately it is often the young or the financially vulnerable that are lured in, with insufficient funds to repay their loans. This highlights the mounting need for more responsible advertising – with the consequences of not meeting repayments made clearer.

“Consumers should also be given clear repayment plans. The majority of loans are for one month, but if consumers miss the repayment date they are immediately placed on an extortionate rate of interest. We are calling for a tiered repayment system, where interest increases in stages, giving breathing space to consumers struggling to get back on track with repayments.

“Payday loans may serve a purpose, providing a fast, short-term injection of cash to people who need it for a defined, limited period and have the means to pay it back. But, as they currently stand, it is clear is that they are doing more harm than good. It’s vital that the OFT clamps down quickly on the irresponsible players in the market and provides the necessary legislation to bring them firmly back in line with other lending practices.”

FOR MORE INFORMATION

Charlotte Nunes

Phone: 020 7148 4664

Email: charlotte.nunes@uswitch.com

Twitter: @uswitchPR

About us

It’s all about “U”!

Thank you for indulging us over the last 20 years by using a small ‘u’ and a big ‘S’ when writing about our brand in your articles.

We are delighted to let you know that you are now off the hook - it’s big U’s all the way (and small s’s) as we undertake our biggest ever rebrand - so let your autocorrect go wild!

About Uswitch

Uswitch is the UK’s top comparison website for home services switching. Launched in September 2000, we help consumers save money on their gas, electricity, broadband, mobile, TV, and financial services products and get more of what matters to them. Last year we saved consumers over £373 million on their energy bills alone.

Uswitch is part of RVU, a new business that also owns Money.co.uk and Bankrate.

If you would no longer like to receive our press releases please email prteam@uswitch.com with 'unsubscribe'.