Payday loans in the United Kingdom
The Consumer Credit Act 2006 explicitly requires the OFT to consider irresponsible lending in its evaluation of whether a lender is fit to hold a licence.
"[9] In this report they concluded that changes could be made to the industry itself, but that "more radical approaches would be required if the Government or others wanted to tackle the wider social, economic and financial context in which high-cost credit markets exist.
"[9] To get a good idea of the size and range of payday loan companies operating in the UK, comparison sites are a useful tool, as recommended in the OFT report – "We recommend that the Government works with industry groups to provide information on high-cost credit loans to consumers through price comparison websites.
If this cannot be undertaken on a voluntary basis, the Government should consider the case for introducing legislation to create a single website allowing consumers to compare the features of home credit, payday and pawnbroking loans alongside credit unions and other lenders in their local area.
It was very critical, giving the 50 leading lenders just 60 days to address the issues raised or risk losing their licences.
It referred the market to the Competition Commission for "deep-rooted problems in how payday loan companies compete"[10] In 2018 following a lawsuit between a man from Chorley, Lancashire, England and the Financial conduct authority, new laws were introduced with new restrictions on payday loans in the UK.
[11] These rules introduced three key points of regulation: Google declared that as of 13 July 2016, advertising of payday loans would no longer be possible however this implementation was limited in the UK.
Vince Cable MP said in 2008 that "the growing popularity of these kinds of short-term loans highlights the problems stemming from the credit crunch and unsustainable levels of personal debt in the UK.
[14] In 2010 a campaign organised by pressure group Compass to "end legal loan sharking" and apply interest rate caps in the "high cost credit sector" saw over 200 MPs sign an Early Day Motion by April 2011.
Packman says: "given the regulatory landscape currently in force we have to trust [lenders] on their word that they follow a self-defeating business model ...
[citation needed] In 2013 payday broker Cash Lady was widely criticised over an advertising campaign which featured Kerry Katona.
[24] One month later the ASA ruled that Cash Lady could no longer use Katona in adverts, as she was too heavily associated in people's minds with debt.
