"It is good news that the OFT has set clear guidance over the ways it expects payday lenders to use continuous payment authority to recover debts - but better debt collection methods is just one element of the wider concern about how the payday lending industry is regulated.
Varying repayment dates and payable amounts has always been a dirty tactic used by payday lenders, and something that the OFT have closed in on before – however what we need in the UK is regulatory architecture with teeth.
David Fisher, director of consumer credit at the OFT said earlier this year that he hoped the Financial Conduct Authority (or FCA - which will eventually replace the OFT in responsibility of consumer credit regulation) would bring the prospect of greater regulation, as at present there is “a very light-touch regime”.
However even getting close to this is proving problematic as efforts are still being made to add an amendment on the Financial Services Bill to give the FCA power to cap the total cost of credit. Until such regulatory common sense is considered then lenders will still have free terrain over vulnerable consumers.''
Carl Packman is the author of the recently published Loan Sharks.