Report highlights the harm caused by payday lenders

Cheque Centre, High Street, Sheffield
Cheque Centre, High Street, Sheffield
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The pressure is building on payday lenders after a damning report found they were doing ‘enormous detriment and harm’. Global accountants’ body ACCA has just published ‘Fixing a broken market’, which found that in 2012 borrowers spent more than £900m on payday loans and £450m of that was on loans subsequently ‘rolled over’ into new loans.

It concluded: “It seems many payday loans serve only to increase the likelihood of indebtedness.

“Regulation has the potential to fix the payday lending market, which is currently failing.”

Last month the Cheque Centre chain pulled out of payday loans on the day new strict new regulations from the Financial Conduct Authority came into force.

Sheffield Central MP Paul Blomfield has been campaigning against rip off loans.

He said: “I want to see the Financial Conduct Authority punish any lender that breaks the new regulations. They need to stamp out the rip-off practices that are doing so much damage to people’s lives.”

A Cheque Centre spokesman said: “Six months ago we decided to move away from the payday product, and we have now completely left the payday market.

“In the future we are going to concentrate on our significant foreign currency business, new loan products as well as traditional pawnbroking services.”