OFT takes payday lenders to task over 'aggressive debt collection'

Payday lending firms face a formal investigation by the Office of Fair Trading following a flurry of complaints.

by Rebecca Burn-Callander

The payday loan industry has had its wrist slapped again today following news that several firms have been using aggressive, strong-arm tactics to recover debts. ‘We have uncovered evidence that some payday lenders are acting in ways that are so serious that we have already opened formal investigations against them,’ explains David Fisher, the OFT’s director of consumer credit.

It appears that many firms are lending to people that are unable to pay the money back, who are then being slapped with interest fees of up to 4,000%. As debts spiral out of control, lenders are becoming increasingly aggressive in their attempts to collect what is owed.

The OFT has opted against naming names, but has revealed that it is writing to all 240 lenders in the market to voice its concerns. Some 50 firms are likely to receive an additional warning over their aggressive debt collection tactics. ‘Lenders need to improve their business practices or risk enforcement action,’ says Fisher.

Sign in to continue

Sign in

Trouble signing in?

Reset password: Click here

Email: mtsupport@haymarket.com

Call: 020 8267 8121



  • Up to 4 free articles a month
  • Free email bulletins

Register Now

Get 30 days free access

Sign up for a 30 day free trial and get:

  • Full access to managementtoday.co.uk
  • Exclusive event discounts
  • Management Today's print magazine

Join today