Payday loan lead generators in the crosshairs

The Competition and Markets Authority (CMA) has published its provisional findings on the payday lending industry. 

David Rodger, chief executive of  Debt Advice Foundation, commented: “We are pleased to see that the huge problem of rogue lead generators and credit brokers has been identified. 

“Lead generators are unregulated and routinely pass themselves off as lenders just to generate lists of contacts to be sold on.  Often even we struggle to tell the difference between a licensed lender site and an unlicensed lead generator, so customers really don’t stand a chance.

 “Often based overseas, they flaunt regulations outrageously – some of the earliest use of cartoons and inappropriate language in payday loan promotion came from lead generators.

“Because these are simply marketing sites, they pop up and disappear as quickly, making them difficult to track, let alone regulate, and leaving huge amounts of distress in their wake.

 “Borrowers find themselves passed on to different companies and end up not even understanding who they are borrowing from, let alone what the terms are or how much it’s going to cost them if they are late with their repayments.

“While this is a rampant online problem, it is effectively hidden from most people because you have to do the initial search for a payday loan – unlike the more upfront marketing efforts of mainstream online and high street payday lenders.

We would strongly urge the regulators to make all loan companies that purchase leads responsible for the actions of the lead generators, who are effectively acting as their agents.”

For the full CMA report, click here