OFT raids offices of payday lenders

Figures from the Office of Fair Trading obtained by law firm Pinsent Masons show that a total of 68 payday lenders’ offices were searched in the first five months of this year.  Just one similar visit was made in 2011.

According to the law firm the raids, which were carried out using formal powers of entry set out in the Consumer Credit Act, will have allowed officials to check a wide range of business operations.  These could have included checks on phone calls, loan applications and how decisions about loans were made. 

The OFT is currently investigating claims that some short-term, high-interest lenders are failing to carry out credit checks to ensure that borrowers have enough income to repay the loans.  They are also investigating the way in which interest and fees can double the amount owed in just a few months if loans are rolled over, leaving many borrowers with unmanageable levels of debt. 

For more details go to http://www.pinsentmasons.com/en/media/press-releases/2012/oft-business-property-searches-soar-in-the-first-five-months-of-2012/

Or for more on this story, see:  http://www.independent.co.uk/money/loans-credit/payday-loans-firms-raided-by-watchdog-8201373.html