PAYDAY lenders are continuing to exploit consumers, despite having signed up to a code of conduct 12 months ago, a consumer watchdog has claimed.
A report by Citizens Advice Scotland found that many short-term loans companies are still not following regulations. Less than half of payday lenders in Scotland are telling people that loans should not be used for long-term financial problems, while only one in three is checking peoples’ financial background before giving a loan.
“When the payday lenders published this voluntary code last year, we made clear we would be watching them like a hawk to make sure they kept to their word,” said Citizens Advice Scotland chief executive Margaret Lynch. “The Payday Lenders have had their chance to clean up the industry and they have failed. It’s time now for the regulators to step in and do it properly.
Russell Hamblin-Boone, chief executive of the Consumer Finance Association, which represents the major short-term lenders operating in the UK, said: “While we understand CAS’ concerns and are working with the debt advice charities to stamp out poor practice, the figures do not reflect the experience of most customers.”