Broken promises from Payday Lenders
A survey conducted by Citizens Advice found that most lenders are failing to remind clients that their loans, which can carry equivalent annual interest rates in excess of 5,000%, are not a long-term fix nor are they checking whether the borrower can repay the money.
The survey results are likely to be looked at closely by both MPs and debt counselling organisations with increasing concerned about the industry's tactics after Payday lenders broke a series of promises to reform their industry. Six months on from the launch of an industry charter, evidence to be released on Tuesday by Citizens Advice found lenders had broken 12 of 14 of their industry pledges to treat customers fairly.
"I am very disappointed to see these worrying findings from Citizens Advice," said the consumer minister, Jo Swinson. "Consumers, and particularly those who are most vulnerable and struggling financially, should expect lenders to treat them in a way which matches up to the commitments made in industry codes. This is clearly not happening and more needs to be done to address the problems we are seeing.”
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