Crackdown on payday lenders urged

New powers allowing the consumer watchdog to shut down firms with immediate effect should be used urgently against payday loan firms, Citizens Advice has claimed. It wants the Office of Fair Trading to suspend the licences of four payday lenders, including two household names, that it said are causing distress to consumers.

The charity has compiled evidence showing that payday lenders are charging excessive fees, taking money from people even after their debts have been cleared and harassing customers by phone, text and email.

The four firms singled out have also been accused of aggressive and abusive behaviour and of chasing people who had never even taken out a loan with them.

The OFT will from Tuesday have new powers immediately to suspend a licence if it is considered necessary to protect consumers.