OFT threatens to close down payday lenders

The Office of Fair Trading (OFT) has told the country's 50 leading payday lenders that they have 12 weeks to change their business practices or risk losing their licenses.

It said it had uncovered evidence of "widespread irresponsible lending" and failure to comply with the standards required of them following a compliance review of the £2bn sector. The OFT also announced that, subject to consultation, it proposes to refer the payday lending market to the Competition Commission after it found evidence of deep-rooted problems in how lenders compete with each other. Among the failings that the OFT identified were that lenders were failing to conduct adequate assessments of affordability before lending or before rolling over loans, and that they were faili...