Those worried about lender credentials should check licences

With the Office of Fair Trading conducting an investigation into the nation’s instant cash loan providers to weed out those using predatory lending practices to grow their coffers in unethical ways, industry experts say that if you need to find a payday advance lender but are afraid of falling afoul of those few giving the industry a bad name, you can look them up via the credit licence register to find out the truth.

The register is a list of all lenders with valid credit licences, and will list any actions taken against lenders – giving you peace of mind that the provider of short term loans you are considering to use has a clean record and is not subject to scrutiny from the OFT.  The watchdog can sometimes take years to finalise its decision to take away a credit licence from a lender, according to a Business, Innovation and Skills Committee report, leaving lenders free to continue to do business until the final decision is made.

Even when the OFT puts a notice on the credit register that it has plans to revoke a lender’s licence, the watchdog is not permitted to publicise this fact.  No press releases are made to draw attention to the fact, and only through checking the register manually will you discover the information yourself.

In addition, companies are permitted time to appeal the OFT’s decision, and during this time they are permitted to trade as before.  These firms are therefore under no obligation to inform prospective borrowers that its licence is under review, which could lead to many issues in the future for consumers that find themselves victimised in the meantime.

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