The Noose Is Getting Tighter Around Payday Loans Lenders Necks In The Uk Mar 8, 2013Views: 436
Most people think that payday lenders in the UK are scum, and going by the recent revelations of a year long investigation into payday lending they would be right to think so.
Payday loans are usually small, short term, high interest loan products, designed to meet the needs of people who run short of cash before their payday arrives. The salary advances offered by short term loans companies are generally aimed at members of our society who have adverse credit (Poor Credit History) and find it difficult to approach high street banks for loans. The typical payday loan applicant, according to data released, earns less than 25k a year and has blemishes on their credit file that make obtaining longer term loans with a more favorable APR extremely difficult - but things look like they are set to change.
The results of the year long independent investigation into payday loans and payday lenders activities in the Uk, commissioned by the government, revealed how extensively pay-day companies are flouting the law.
Some of the suggestions made by the group of people investigating this financial sector were;
- Reduce the amount of times payday lenders are allowed to advertise on TV and also select times of day in which they can advertise.
- Stricter advertising standards: Force lenders to display APR prominently on all loan advertising.
- Ensure advertising is not luring people into making a bad loan application decision.
- Force payday lenders to share applicant information.
- Alter payment authorities or ban them altogether.
- Cap or ban payday loan roll overs.
The report stopped short of calling for a cap in APR, which i also agree with.
The current changes being planned, and some that have already taken place such as instant removal of consumer credit licenses, will see payday lenders forced to clean up their act or face fines that have no limit or instant bans from the market.
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