Consumer body Citizens Advice reported ‘alarming’ business practices of the payday lender Toothfairy Finance to the OFT.
Citizens Advice presented a dossier of evidence to the OFT in February 2013 asking them to take immediate action to stop four payday lenders and three debt collection companies trading.
The evidence provided by Citizens Advice sparked formal investigations and Citizens Advice continued to provide OFT with consumer complaints. All of the companies it reported are no longer able to lend money or collect debts.
The firms were Tooth Fairy Finance, Easy Finance Club and Community Pay Day who all came under the licence of Web Loan Processing Limited who went into administration in November 2013. Linked companies Marshall Hoares Bailiffs Limited and Northern Debt Recovery Limited surrendered their licences. CIM Technologies Limited licence lapsed in April 2013 which means it can no longer operate.
The other payday lender was MCO Capital Limited (which ran Speed Credit) and was shut down by the OFT in March 2013.
Citizens Advice Chief Executive Gillian Guy said:
“This sends a strong message to unscrupulous companies that exploiting customers does not deliver a sustainable business. The sharp practices employed by these firms were particularly alarming and caused significant distress for customers.
“In some cases, people were subject to constant harassment, left seriously out of pocket and given no option to get on top of their debts. What was supposed to be a quick fix turned into a debt nightmare.
“There is now an onus on the company which has bought the loans to treat people fairly and within the law.
“This case is a timely reminder of the need for tough action against a booming payday loan industry that is preying on its customers. It is vital that the Financial Conduct Authority sticks to its guns to clamp down on payday lenders and debt collectors to make sure people are treated fairly. The regulator must put new applications to lend money or collect debts under serious scrutiny.”
