Sheffield MP Paul Blomfield has backed a new investigation into the debt collection practices of payday lenders.
The Financial Conduct Authority is to carry out an ‘in-depth thematic review’ into the way firms collect debts and manage borrowers who are in arrears.
Mr Blomfield – the Labour MP for Sheffield Central who is running a campaign to ‘stop the rip-off’ of payday loan companies , backed by The Star – said: “This new inquiry gets to the heart of the concerns I’ve been raising about the behaviour of payday lenders.
“Companies are lending to people who can’t afford to repay their loans, then hitting those borrowers with punitive charges and trapping them in spiralling debt.
“The FCA’s investigation must get to the heart of the exploitative business model that too many payday lenders are operating and put a stop to the payday loan rip-off.”
The review will be one of the first actions the authority undertakes as the regulator of consumer credit from Tuesday, April 1.
Martin Wheatley, chief executive, said: “There will be no place in an FCA-regulated consumer credit market for lenders that only care about making a fast buck.”