The Church of Scotland has welcomed last week's findings of the Office of Fair Trading’s compliance review into payday lenders and the consequent proposal to refer the sector to the Competition Commission.
The Office of Fair Trading (OFT) has given the leading fifty payday lenders, accounting for 90 per cent of the payday market, 12 weeks to change their business practices or risk losing their licences, after it uncovered evidence of widespread irresponsible lending and failure to comply with the standards required of them.
The Rev Sally Foster-Fulton, Convener of the Kirk’s Church and Society Council has consistently spoken out on this subject and welcomes the review into the sector.
Ms Foster-Fulton said: “I’m pleased that the OFT has investigated the activities and practices of payday lenders who target the most economically vulnerable in society.
“I am shocked that payday lenders target the most economically vulnerable in society by advertising ease of access to funds, at the expense of explaining the price of a loan.
“Granting people loans which they cannot afford to pay back, at interest rates of up to 4000 per cent is exploitative and has to stop.
“Payday loan companies pretend to be a solution to people’s financial problems when the truth is they cause more and solve none,” she declared.