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Payday loans - CAS backs OFT decision

Citizens Advice Scotland have backed the OFT’s decision to refer the payday loans industry to the Competition Commission, over concerns about how the industry works.


CAS Policy Manager Keith Dryburgh says,

“It’s clear that many payday lenders have been operating irresponsibly for some time, and have been taking advantage of vulnerable people, making their financial situation even worse. CAB advisers see the people every day who have fallen victim to these unfair practices. The growth of payday loans in the last few years has led many families into the misery of un-manageable debt. Our interest is to protect consumers against this.

“For people who are struggling to make ends meet, payday loans can seem very attractive. But they have Interest Rates as high as 4,000%, and these have a huge impact on people who are on low incomes. We also find that many lenders are not being clear about their terms and conditions, are offering loans to people without proper assessment of their income, and are then pursuing the debts aggressively, and in some cases taking money from people’s bank accounts without telling them.

“So it has been clear for some time that the industry needs to clean up its act. ‘Business as Usual’ is just not an option. The industry promised last year to stamp out bad practice voluntarily with a new Code of Conduct, but we have been monitoring the experience of borrowers since then, and it is clear that many of the problems are continuing. So that’s why we support the OFT’s action today.

“We also have a strong message for anyone who is thinking of taking out a payday loan. Think very carefully about what you are getting into, and don’t sign up to anything without reading the small print. You can get free advice on debt and money issues from your local CAB. And we urge those who have actually taken out a payday loan in the last 6 months to tell us about their experience through our quick survey at

For interviews etc please contact Tony Hutson – 07774 751655.

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