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UK: After OFT crackdown, 14 exit payday loan business altogether

By  |  July 30, 2013

The Office of Fair Trading announced that nearly one-third of the 50 payday lenders the regulator cracked down on for anticompetitive behavior have completely left the payday loan business altogether. The news comes following the passing of the OFT’s deadline for the companies to respond to the regulations. Since, the OFT said 14 plan to leave the business, three of which will stop offering credit altogether, and one failed to meet that deadline. The sector has been referred to the Competition Commission over concerns the market is not focused enough on competitive pricing for consumers. Just last week the archbishop of Canterbury announced plans to establish his own payday firm, backed by the Church of England, to compete lender Wonga out of the market. Some loaners offer money to customers with interest rates as high as 1,000% APR. The regulator declined to name the companies that decided to withdraw from the payday loan industry, though the withdrawals will reportedly take immediate effect.

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