Payday loan breaches 'unacceptable'

David CameronIt is not acceptable that many payday loan companies are ignoring strict rules governing the sector, Prime Minister David Cameron has said.

He said greater regulation in the industry was needed, telling MPs the Government had given the Office of Fair Trading new powers to suspend licences when firms flout the rules.
Transgressions often include failing to check whether consumers can afford debt repayments and providing inadequate details about the cost of loans.

In the Commons, Labour MP for Central Ayrshire Brian Donohoe said he wanted to know what the Government was doing to "drive these sharks out of our economy".

Mr Cameron replied: "I think we do need to take action here, that is why we are giving the Office of Fair Trading a new power to suspend the consumer credit licence with immediate effect where there is an urgent need to protect consumers.

"What the OFT report showed is that many companies are not sticking to the guidelines set out and that is not acceptable."
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