MPs and pressure groups targeting instant cash loan providers

Pressure groups and MPs have been targeting instant cash loan providers, calling for more regulation to the payday advance industry and raising questions as to the legal standards these firms may or may not be meeting.

Critics and detractors of no credit check loans have called firms providing the service ‘legal loan sharks’, expressing extreme concern advance of this coming Christmas, with cash-strapped adults looking for ways to shop for the festive season and also meet their monthly expenses.  Margo MacDonald, Scottish MSP, has recently sent a letter to the Office of Fair Trading requesting clarifications on the laws that apply to instant cash loan providers, asking whether or not these firms are subject to regulations that provide borrowers with a cooling off period of 14 days in which they can submit a loan cancellation.

MacDonald also drew attention to a law on the Scottish books that requires at least one witness at a minimum be present at the signing of certain kind of contract agreements.  In the event of such a regulation being enforced in the instant cash loan market, the result could be the voiding of all such loans in Scotland, the MSP said, and as a result her team is now scouring the internet for any websites which it suspects may be breaching regulations prior to any additional discussions with the OFT.

Ms MacDonald’s letter said that her concern is that firms may be treading a razor’s edge between legality and illegality.  Her constituents of modest means were particularly on her mind, the letter went on to say.

Meanwhile, Walthamstow, East London MP Stella Creasy is set to meet with Philip Collins, chairman of the OFT, soon in order to have a discussion instant cash loan firms.

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