OFT Hit Payday Lenders

OFT Hit Payday Lenders.

The Office of Fair Trading has completed a 12 month investigation into the practice of pay day lenders and it seems the government looks set to introduce much tighter rules on advertising, promotion and other activities.

It is thought that stricter advertising standards will be issues alongside a form of regulation given that pay days are designed to appeal to perhaps the most desperate in hard times. They target those that need money quickly and by experience will say “yes” to anything if they can get hold of the money.

Our view

You only have to watch television every day to see advertisements which look and sound fantastic and then you see in the small print 1700% APR etc.

Pay Day loans are expensive, designed to be exceptionally short term given the interest rate, but clearly people can get themselves in trouble very quickly if they do not pay the debt back and leave it to roll for months.

Our advice go and talk to the debt counsellor at the Citizens Advice Bureau before entering into these arrangements as they may be able to negotiate payment terms will the people that you perhaps owe money too and are desperate to borrow on these short term loans to get the money.