Regulator shows why Pay Day lenders should be shutdown – UKIP Deputy Leader

Regulator shows why Pay Day lenders should be shutdown

Payday loans companies have finally been found out as loan sharks with call centres, claims UKIP deputy leader Paull Nuttall, after one of the firms has been pushed into writing-off more than £200million.

The accusation came as Wonga, the biggest player in the short term loan sector has been scolded by the Financial Conduct Authority (FCA) who conducted a review of their practices and found they failed to ensure those they lent to could afford to repay their debts.

The company lend to about 1 million customers a year, and are now set to cancel the debts of some 330,000 borrowers.

Mr Nuttall has long campaigned for stricter controls on pay-day lenders, he said:

“Wonga say their new lending criteria is voluntary, but the truth is, they have been forced into it, to prevent action being taken by the regulator.

“Wonga has long said it’s set-up weeded out bad credit risks and they didn’t lend to those that couldn’t afford the repayments, but today the FCA have said that is not the case.

“This tells you everything you need to know about their lack of ethics and honesty over their practices.

“Pay-day loans companies feed off the vulnerable, desperate and those most in need.

“They should be shut down, but of course the government won’t do that for fear of the resulting food-bank queues going round the block.

“These companies only exist because of the failures of successive government to understand the plight of the poor.

“This is a wake-up call for the pay-day loan companies, but it should also be a wake-up call for the out-of-touch political class.”