One instant cash loan company recently issued an apology for sending threatening emails to customers who had yet to pay back their payday advance, industry experts recently reported.
The lender, who had attempted to elicit debt repayments by threatening to contact the employers of borrowers, has been reported to the National Debtline for acting overly aggressively on several occasions. However, the provider of instant cash loans said that the behaviour will not continue, as it has taken steps to safeguard against actions like that happening in the future.
The Office of Fair Trading, which has announced it will be conducting an investigation into the instant cash loan industry, says that lenders cannot act in a manner that has a high likelihood of causing public embarrassment to debtors. Lenders need to remain in compliance with the OFT’s guidelines if they wish to retain their licence, and breaches – if significant enough – can and have led to the revocation of these licences in the past.
Payday lenders have been under increasing levels of scrutiny as of late, especially in light of reports emerging that there are less reputable loan providers encouraging borrowers to take out loans that they may not be able to repay. Both critics of the industry and honest lending firms alike want to stamp out these cutthroat lenders in order to safeguard low income earning Brits that make up a large proportion of the customer base for payday borrowing.
The OFT has even said that payday lenders provide an important service to individuals in the UK without access to traditional forms of credit, and added that it is in favour of reforms being made to the industry that would limit spiraling debt.