StockMarketWire.com - Citizens Advice is calling on the Office of Fair Trading (OFT) to use its new powers to immediately suspend the licences of four payday lenders to stop the firms operating.

A dossier of evidence from across the Citizens Advice service has been provided to the OFT revealing the firms to be acting unfairly, exacerbating debt problems and causing significant distress.

Problems uncovered by Citizens Advice include:

•firms levying inflated fees and charges;

•continuing to take money when debts have been paid off;

•obstructing customers from making repayments online or over the phone then charging late fees;

•harassment by repeated telephone calls, text messages and emails to repay debts;

•chasing people for debts on loans when the individual didn’t apply for a loan in the first place;

•aggressive and abusive staff.

Citizens Advice has also reported three debt collection companies to the OFT asking for their licences to be suspended.

From Tuesday 19 February 2013 the OFT will have power to immediately suspend the consumer credit licence of companies if it is urgently necessary to protect consumers, for example, because the firms are using business practices which aredeceitful, oppressive or unfair.

Up until now if the OFT wanted to revoke a firm’s consumer credit licence it could continue operating while any appeal process was ongoing. This could take years and in the meantime left thousands of people exposed to the firms’ underhand practices.

Citizens Advice Chief Executive Gillian Guy said:

"The OFT must take immediate action to investigate and suspend these companies. These firms pose a real risk to people looking to get a short term loan to help tide them over.

"Our evidence shows these lenders are behaving as a law unto themselves. Excessive fees and charges are escalating debts and people are worried sick as companies bombard them with texts, emails and phone calls often overstating their debt collection powers.

"With a ten-fold increase in people struggling with payday loans we are keeping a very close eye on the industry and will be reporting any other lenders to the OFT found to be using deceitful tactics."

Citizens Advice is gathering evidence of other lenders who are also found to be contravening the OFT guidance. It is also running a year long study asking payday loan customers to share their experiences of using a payday lender to check whether the industry is complying with its customer charter launched last year.



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