Chris Leslie MP, Labour’s Shadow Financial Secretary to the Treasury, commenting on the OFT’s report on payday lenders and the Government’s response, said:
"This is a damning report on the payday loan industry which the OFT finds has caused ‘misery and hardship’ and has more than doubled over the last three years.
“While we welcome plans to restrict payday loan advertising, it is disappointing that the Government and FSA haven't found a way to clamp down on predatory pricing and extortionate interest charges.
“Thanks to an amendment to the Financial Services Bill which Labour secured in the House of Lords last year, regulators now have the ability to control costs and loan duration. So it is dismaying that Ministers are still resisting controls on the total cost of credit - controls that could prevent vulnerable customers from being fleeced so unfairly. And when the OFT have found that half of the profit for these firms is generated from roll-over loans, we also need action to prevent people becoming ensnared in very high interest personal debt year after year.”