EU to close down rogue instant cash loan companies

The European Union has said that it will close down instant cash loan companies operating in the UK that do not obey rules on consumer standards. Apparently a survey has discovered that eighty percent of companies offering short term short term loans over the internet in this country are flouting information provision requirements.

The inquiry by the EU focused on personal loan companies and credit card companies. However, a website that has been set up by a former victim of short term loans Steve Parry has claimed that there are a large number of companies in this country that do not declare sufficient information about borrowing criteria on their sites.

The site, known as saynotopaydayloans.co.uk, has also reported a short term loan lender to the Office of Fair Trading for not having a valid licence. The instant cash loan company’s licence had apparently expired in December 2010.

Parry described some of the deficiencies of some of these companies, who were offering anything from no credit check loans and same day loans to instant cash loans but without advertising their contact details on their online sites or even mentioning representative APR’s. Some of the supposedly advertised instant cash loan companies are not actually lenders themselves but are actually brokers who act as ago between the instant cash loan borrower and the lender company itself.

The EU Consumer Credit Directive requires all short term loan companies to clearly state the cost of their loans and the borrowing period. In one quick survey of what is available easily online, the Independent newspaper reported that there were literally hundreds of instant cash loan companies available with a only a minority conforming to EU guidelines.

The Independent attempted to contact one of the companies named by Steve Parry’s website but was unable to do so. Parry says that the area of short term loans in Britain was an “absolute minefield” which was “full of deceit and bad practice.”

European finance authorities have apparently been asked by the EU to investigate the culprits and close them down by the autumn this year. It has also promised to make public a list of all companies not obeying the rules in order to publicly shame them.

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