Government ministers summoned for payday lending summit

Government ministers, lenders and regulators have been called upon to attend a summit about the UK’s payday loans industry next week, which aims to come up with solutions to the “widespread irresponsible lending” highlighted by a regulator’s recent report into lenders. The summit will be the first time that representatives of all of these groups have met together in one room. A decision about competition within the industry will be announced before the summit, as the Office of Fair Trading (OFT) is expected to finalise its view this week on whether the payday lending industry should be referred to the Competition Commission. Back in March, the OFT said it had found “deep-rooted” problems in how firms were competing on the speed of providing a loan, rather than the cost. Approximately two million people in the UK use payday loans, according to a recent report by the Commons Public Accounts Committee, and in a number of cases, struggling borrowers have been allowed to roll over loans, only to find the interest rates and the debt spiral out of control. Although the industry is regulated, there has still been criticism of both the regulator and the lenders for failing to protect vulnerable borrowers. The summit will be hosted by Consumer Minister Jo Swinson and will look at powers of the new regulator – the Financial Conduct Authority – and whether they are sufficient. The FCA takes over from the OFT in regulating the industry next year. The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Setfords Solicitors are a national full service law firm, with property solicitors in Redhill and across the country.