Allegations of unfair practices have led to the payday advance lending industry in Northern Ireland facing investigations after a number were visited in secret by Trading Standards, instant cash loan experts recently recounted.
Trading Standards conducted a secret survey of 29 providers of short term loans located within major NI towns only to discover that the lion’s share of lenders lacked to explain the consequences of neglecting to repay loans on time in an adequate manner. Lenders were unable to accurately quote the loan’s annual percentage rate in every case, the watchdog also found, even though legislation concerning consumer credit regulations requires lenders to inform borrowers what the interest rate is on the funds they are borrowing.
Both Trading Standards and the Office of Fair Trading have said that they want laws concerning the carrying out of adequate credit checks prior to lending enforced less unevenly. A large proportion of payday lender legislation is keyed towards preventing vulnerable classes of people or customers already in dire financial straits from making matters worse by undertaking even more debt that they will be largely unable to repay.
Nearly one out of ever three payday lenders visited by Trading Standards in Northern Ireland indicated that they could provide no credit check short term loans to applicants. One lender even made a positive decision to provide a loan after a delay of only 24 seconds, the watchdog reported.
Half of the firms surveyed admitted to a willingness to lend as much as £100 to a borrower that failed a credit check, Trading Standards also reported.