PAYDAY loans are under investigation by the Office of Fair Trading to see if some lenders are taking advantage of people in financial difficulties.
The review will focus on:
Giving loans without first checking adequately that borrower can afford to repay them
Inappropriately targeting groups of people with unsuitable or unaffordable credit
Rolling over loans so that charges escalate and loans become unaffordable
Not treating borrowers who get into financial difficulties fairly.
An OFT spokesman said: “The review will investigate compliance with the Consumer Credit Act and the OFT’s guidance on irresponsible lending. ”