Money Advice Trust boss Joanna Elson hit out at payday loans after National Debtline calls rocketed 116{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} for the first half of the year, compared to the same period in 2011.
The news prompted chief executive Elson to call for greater scrutiny of the rapidly growing industry.
She said: “It is vital that payday lenders, advice agencies and government all subject the practices of this fast growing industry to strong scrutiny.
“Payday loan companies are licensed by the OFT and therefore must comply with the OFT Irresponsible Lending Guidance, something which we have found they repeatedly fail to do. It is however difficult to see where these changes to the voluntary codes of practice go beyond what is already required by the OFT.”
Elson said the Money Advice Trust has seen several areas of particular concern around payday loans and the new codes have done little to address these issues.
She added: “Ultimately, unless a single code of practice binding on all lenders is put in place, clear protection for consumers is unlikely to be achieved. A single code should be accompanied by a robust set of sanctions for non-compliance that is enforceable against lenders and monitored by the OFT.
“It is important to recognise and applaud any moves to protect consumers from falling foul of the payday loans industry, but it is equally important to recognise that there is still a very long way to go.
“It is clear that far more must be done to stem the tide of payday loan problems faced by more and more people across the UK every day.”
Source: Insolvency News