OFT PUBLISHES PAYDAY LENDING REPORT
The OFT has today published their report into payday lending as it affects Isle of Man consumers.
OFT Chairman David Quirk MHK explained “In March this year the United Kingdom Office of Fair Trading published a damning report into the payday loan industry in the UK. It concluded that it had found fundamental problems with the way the payday market works and widespread breaches of the law and regulations, causing misery and hardship for many borrowers. The OFT, having regard to its role as the registration authority under the Moneylenders Act 1991 which includes payday lending, and its various other consumer protection roles, determined that it should undertake a review of payday lending as it impacted upon local consumers.”
The review reached a number key conclusions:-
- There is no evidence of significant concern from actual local consumers who chose to utilise payday loans.
- Local payday lenders are far more compliant with the UK standards of responsible lending than their UK counterparts.
- There is no evidence to support the need for upgraded regulation for local moneylenders.
- Manx consumers who choose to access the UK market are currently exposed to the same level of bad practice as UK consumers.
- Provided that the UK authorities, through the reference to the Competition Commission, resolve the current difficulties, the ability to access the UK online market offers enhanced consumer choice and competition in the market place.
- Whilst it has been suggested that there should be an interest rate cap on the recovery of credit debts through Manx Courts the OFT is satisfied that section 11 of the Moneylenders Act 1991 offers sufficient protection from extortionate transactions.
Mr Quirk concluded “In our various roles we will continue to monitor the moneylending market and will consider any future need for enhanced regulation based on emerging evidence. We will revisit the issue of local consumers accessing the UK payday loan market following the outcome of the current UK market review.”