The government has failed to regulate loan companies who continue to profit from the austerity that the UK is currently experiencing. Surely the ‘loan shark industry’ is out of control?
In March this year, the Office of Fair Trading announced that it was warning the top 50 payday lenders about their conduct, with the threat they could remove their trading licence. Five months down the line only two have disappeared. One closes and another half a dozen open up for business. Indeed, the new Financial Conduct Authority admits that it could take a number of years before new tougher powers could bring the industry to heel.
Commenting, Gerald Irwin of Sutton Coldfield based Licensed Insolvency Practitioners and Business Advisers, Irwin Insolvency said, “It is fair to say that not everybody becomes a victim of the payday loan sector but hundreds do as a result of the terms of the loan. There are severe and distressing consequences of rolling over a payday loan. There is evidence that a high proportion of the loans are being used to pay off yet another payday loan leading to a spiral of debt.”
Why is it that other countries have already capped the cost of credit and require real-time credit checking which has limited irresponsible behaviour yet the UK government continues to resist such measures whilst, at the same time protesting they are getting tough. Does it all smacks of hypocrisy?