Are Payday Loans Out Of Control?

ARE PAYDAY LOANS OUT OF CONTROL? WHAT'S HAPPENING? MoneyPlus GROUP The OFT is giving the leading 50 payday lenders, accounting for 90 per cent of the payday market, 12 weeks to change their business practices or risk losing their licences, after it uncovered evidence of widespread irresponsible lending and failure to comply with the standards required of them. 12 WEEKS UPTO £2.2 BETWEEN 7.4 AND 8.2 MILLION BILLION NEW PAYDAY LOANS IN 2011/12 ESTIMATED VALUE OF THE UK PAYDAY LOAN MARKET IN 2011/12 AREAS OF NON-COMPLIANCE LENDERS FAILING TO CONDUCT ADEQUATE ASSESSMENTS OF AFFORDABILITY BEFORE LENDING OR BEFORE ROLLING OVER LOANS FAILING TO EXPLAIN ADEQUATELY HOW PAYMENTS WILL BE COLLECTED USING AGGRESSIVE DEBT COLLECTION PRACTICES NOT TREATING BORROWERS IN FINANCIAL DIFFICULTY WMITH FORBEARANCE. AROUND 1 IN 3 LOANS ARE REPAID LATE OR NOT REPAID AT ALL % OF PAYDAY LOANS ROLLED OVER OR REFINANCE 5% 5% LOANS ROLLED OVER 4 OR MORE TIMES 17% LOANS ROLLED OVER 2-3 TIMES 73% LOANS ROLLED OVER ONCE LOANS NOT ROLLED OVER OF REVENUE FROM PAYDAY LOANS ROLLED OVER OR REFINANCE LOANS NOT ROLLED OVER 19% LOANS ROLLED OVER 4 OR MORE 50% 16% TIMES 15% LOANS ROLLED OVER 2-3 TIMES LOANS ROLLED OVER ONCE Based on data submitted to the OFT by 21 payday lending companies between 01/04/2011 - 31/03/2012 38 OUT OF 50 PAYDAY LENDERS INSPECTED BY THE OFT FAILED TO COMPLY WITH AT LEAST ONE OF THE COMPLAINT HANDLING RULES OF THE FINANCIAL OMBUDSMAN SERVICE MoneyPlus Sources GROUP http://www.oft.gov.uk/news-and-updates/press/2013/20-13#.UTh5LBmcDWo http://www.oft.gov.uk/OFTwork/credit/payday-lenders-compliance-review#.UTh7DhmcDWo Infographic designed by moneyplus.com ARE PAYDAY LOANS OUT OF CONTROL? WHAT'S HAPPENING? MoneyPlus GROUP The OFT is giving the leading 50 payday lenders, accounting for 90 per cent of the payday market, 12 weeks to change their business practices or risk losing their licences, after it uncovered evidence of widespread irresponsible lending and failure to comply with the standards required of them. 12 WEEKS UPTO £2.2 BETWEEN 7.4 AND 8.2 MILLION BILLION NEW PAYDAY LOANS IN 2011/12 ESTIMATED VALUE OF THE UK PAYDAY LOAN MARKET IN 2011/12 AREAS OF NON-COMPLIANCE LENDERS FAILING TO CONDUCT ADEQUATE ASSESSMENTS OF AFFORDABILITY BEFORE LENDING OR BEFORE ROLLING OVER LOANS FAILING TO EXPLAIN ADEQUATELY HOW PAYMENTS WILL BE COLLECTED USING AGGRESSIVE DEBT COLLECTION PRACTICES NOT TREATING BORROWERS IN FINANCIAL DIFFICULTY WMITH FORBEARANCE. AROUND 1 IN 3 LOANS ARE REPAID LATE OR NOT REPAID AT ALL % OF PAYDAY LOANS ROLLED OVER OR REFINANCE 5% 5% LOANS ROLLED OVER 4 OR MORE TIMES 17% LOANS ROLLED OVER 2-3 TIMES 73% LOANS ROLLED OVER ONCE LOANS NOT ROLLED OVER OF REVENUE FROM PAYDAY LOANS ROLLED OVER OR REFINANCE LOANS NOT ROLLED OVER 19% LOANS ROLLED OVER 4 OR MORE 50% 16% TIMES 15% LOANS ROLLED OVER 2-3 TIMES LOANS ROLLED OVER ONCE Based on data submitted to the OFT by 21 payday lending companies between 01/04/2011 - 31/03/2012 38 OUT OF 50 PAYDAY LENDERS INSPECTED BY THE OFT FAILED TO COMPLY WITH AT LEAST ONE OF THE COMPLAINT HANDLING RULES OF THE FINANCIAL OMBUDSMAN SERVICE MoneyPlus Sources GROUP http://www.oft.gov.uk/news-and-updates/press/2013/20-13#.UTh5LBmcDWo http://www.oft.gov.uk/OFTwork/credit/payday-lenders-compliance-review#.UTh7DhmcDWo Infographic designed by moneyplus.com