Friday, May 31, 2013

Regulators told to crack down on predatory lenders

Britain's consumer watchdog must get tough on unscrupulous short-term lenders that target low earners with loans they cannot afford to repay, a British parliamentary committee said on Friday.

Britain's Public Accounts Committee (PAC) said bad practices by some of these firms were costing already hard-pressed borrowers at least 450 million pounds a year.

So-called payday lenders, which offer loans that are repaid when borrowers get their wages, have grown rapidly in Britain as banks cut back on short-term credit after the 2008 financial crisis. But they have been criticised for charging sky-high interest rates and for shoddy treatment of customers.