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Nineteen payday lenders in OFT probe quit the market

Tahmina Mannan
Written By:
Tahmina Mannan

Nineteen of the UK’s 50 payday lenders under investigation by the regulator have said they are leaving the market.

The Office for Fair Trading has confirmed that of the 19, four have already surrendered their licenses and therefore will be winding down their businesses altogether. 

The four that have handed in their licenses will also no longer be required to provide an audit report.

The remaining 15 will continue to trade in other areas of business that require a credit licence and have been required to provide an audit report to the OFT.

Payday lender and Britain’s largest pawnbroker H&T has publicly stated that they are one of the firms leaving the payday market, after failing to submit its audit report by the deadline.

The company has also recently hit out against payday giant Wonga for charging ‘ludicrous’ interest rates to customers.

In addition to the 50 leading lenders, and since the OFT published its final payday review report in March, three firms engaged in payday lending have had their licences revoked and another three lenders have also surrendered their licences.

Anyone who has borrowed money from these lenders will still have to pay them back in exactly the same way as before. However the lenders will not be offering new loans.

Figures released by the Competition Commission revealed that payday lenders have seen a four-fold increase in turnover between 2009/10 and 2011/12.

It also reported that the three largest payday firms – Wonga, Cash America, which owns Pounds to Pocket and QuickQuid, and Dollar Financial Corp, which is behind The Money Shop and PaydayUK – have roughly a 70% share of the payday market by turnover.

The OFT also estimated that in 2011/12 payday lenders’ turnover across the industry was £860m.

Payday lenders charge high interest rates, sometimes as high as 5,000% APR.

The Competition Commission and OFT are continuing their investigation into the the payday industry, and want to hear views from interested parties by 20 September 20 evidence towards its probe.

Evidence can be submitted by emailing paydaylending@cc.gsi.gov.uk.

Names of companies that have surrendered

Surrendered (of the 50)
• Hamilton Management Company Ltd (Trading name: Anfield Cheque Cashing Services)
• The Payday Loan Co Ltd (Trading names include: Cashnet/ Paydayloan.co.uk/ Telecash/ The Payday Advance Company/ The Payday Loan Company)
• Speed-e-loans.com
• Cash Advances Ltd (New) (Trading Names: Handycash/ Wagestoday)

Surrendered (not part of the 50)
• Keyring Ltd (Trading Name: Keycash)
• Paydaycredit Ltd (Trading name: Submenow)
• Geoffrey Michael Cavalier (New) (Trading names: Cash Express/ Post Box Express)

Names of firms exited payday market
H&T has publically stated that they are one of the firms leaving the payday market.