Legal News

Citizens Advice seem to be urging the Office of Fair Trading to use its new powers to suspend licenses of four payday loan companies whose names have been withheld.
The charity has said that these particular companies were behaving as ‘a law unto themselves’ bombarding people with texts and phone calls, inflating their charges, continuing to take money even after a debt was paid off, and obstructing customers from making repayments online or over the phone and squeezing late fees out of them.
The Citizens Advice Bureau has been saying that it had evidence to prove aggressive and abusive staff willing to harass their customers.
Starting of this week the OFT has been given powers to immediately suspend consumer credit licences of companies if the measure was thought urgently necessary to protect consumers.
Till date the OFT could only revoke licenses but the appeals process meant that the companies could still continue to operate while the case was pending.
Gillian Guy, chief executive of Citizens Advice, said the OFT must take immediate action to investigate and suspend these companies. These firms were posing a real risk to people looking to get a short-term loan to help tide them over.
He added that they had the evidence to show that these lenders were behaving beyond the law itself and were charging excessive fees and charges with the debt seemingly never ending and people worried sick as they were being bombarded with texts, emails and phone calls often overstating their debt collection powers.
The chief executive said that there was a tenfold increase in people struggling with payday loans and the CAB was keeping a close eye on the industry and would be reporting any other lenders to the OFT found to be using deceitful tactics.
It said it was gathering evidence of other lenders it considered guilty of bad practice.
Last week the Citizens Advice had released new statistics demonstrating a worrying increase in the number of serious debt cases relating to payday loans.
The Citizens Advice service has seen a ten-fold increase in the proportion of clients receiving casework help with multiple debts which included a payday loan debt in the last four years.
Citizens Advice bureaux, which comprises a network of 28 offices, helped clients deal with over £75 million of debt in 2012.
Advice given by money and debt advisers has supported clients with which of their debts to prioritise, as well as informing them of their right to stop payday lenders taking money straight out of their bank account. Citizens Advice also assists those in financial difficulty by preparing a budget and negotiating a manageable repayment plan with the lender on a client’s behalf.