Britainās payday lenders have been referred to the Competition Commission.Ā The referral comes after watchdogs raised concerns about non compliance within the industry and means a full, 12 month investigation of every practice in an industry that processes eight million short term loans a year and is worth an estimated Ā£2 billion.
Simon Kirby, Member of Parliament for Brighton Kemptown and Peacehaven has welcomed the news.
He said:
āThe evidence of the scale of unscrupulous behaviour by payday lenders and the impact on consumers is deeply concerning. Loans should be available on fair and reasonable terms.ā
Ā āI have raised this issue with Ministers and am pleased that the Government has announced new enforcement action and unprecedented changes to the regulation of consumer credit which will send a clear message to lenders that if they do not comply with the rules, action will be taken.ā
Criticism has been levelled at the Office of Fair Trading for being slow to react to this issue. From 2014 the Office of Fair Trading and Competition Commission will be merged into one Financial Conduct Authority with a much more focused remit allowing it to intervene early and decisively in their interests of consumers.
Simon concluded:
āResidents needing to access credit, particularly the most vulnerable in society, should have access on fair and reasonable terms.ā
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