Payday lenders surrender licences after OFT pressure

The regulator has revealed that 10 lenders have exited the payday lending market after it wrote to 50 firms to request they improve their practices.

The Office of Fair Trading (OFT) has received responses from 28 of the 50 lenders, with 26 of these providing audited reports as part of its crackdown on the sector.

It confirmed that The Payday Loan Company, which trades under several names including Cashnet, and Hamilton Management Services, which trades as Anfield Cheque Cashing Centre, have surrendered their consumer credit licences altogether.

Eight of the firms which responded have left payday lending but continue to operate in other business areas that require a licence.
The OFT could not name those companies which are still trading.

The payday lending sector was referred to the Competition Commission last month by the OFT after it raised concerns about the way firms compete in the market.

In addition to the 50 leading lenders, and since it published its final report in March, three firms engaged in payday lending have had their licences revoked, including MCO Capital.

The other two are cheque cashing businesses offering payday loans; B2B International UK Ltd and Loansdirect2u.com.

They had their licences revoked after it came to light that Neil Evans, an associate director of both companies, had been convicted for offences involving violence and fraud. Both businesses are based in Brighton.

The OFT also has three ongoing formal investigations into payday lenders, although it has declined to give further detail on these.

According to the OFT, the status of two businesses which should have submitted audited reports by this time is to be confirmed.

By Ellie Duncan (Credit Today)