UK: Consumers happy about payday loan experience – did OFT overreact?

A recent poll found 49 percent of people who used payday loan services felt their experience was “positive,” a revelation that comes as the sector has taken hard hits from the Office of Fair Trading. The OFT announced last month that 15 payday lenders have altogether left the market since the regulator first announced proposed regulations to impose on the lenders, often described as anticompetitive by government officials. Last month, the archbishop of Canterbury also got involved in the debate, vowing to establish his own payday firm to compete the top lender Wonga out of the industry. But a recent poll, posted on comparison site uSwitch, found that in addition to the nearly half of consumers who agreed they had a positive experience with their payday lenders, one-third agreed they would take out another loan. Personal finance expert at uSwitch Michael Ossei told reporters the results suggest people are turning to the payday loan industry following a 25 percent hike in the cost of living in the past five years and feel “they have no other option” when big banks turn them down. The site concluded that while people feel “failed” by big banks, consumers agree the payday loan industry could use more regulation.