Payday loans have become a common solution for struggling citizens. These sorts of loans are extremely popular especially in the UK, a country whose economy is starting to shake. The Office of Fair Trading is very concerned about the threats that payday lenders pose on the economy. While they offer quick funding solutions, the long term consequences are hard to endure for an average citizen.
Payday loans are short term credits that an employed person can receive. They are a fast solution for unpredicted expenses. However taking into account the present economy such loans are becoming more of a habit than a one-time fix. Payday loans are aggressively advertising their services making it hard for a person to properly evaluate whether or not such a solution is in their advantage.
While their practices are quite legal their techniques imply taking advantage of the weak unsuspecting citizens. Some might say that the same thing is true about banks. However that is far from being correct because banks have a more severe selection process when it comes to offering credits. Short term loans are not encouraged because they have high rates and are not in the consumers’ interest.
The Office of Fair Trading has threatened payday institution; unless they modify their system they will face consequences. However the OTF has not given specific details regarding which parts of the practice the companies need to revise.
There are some companies that may have a lot of issues; others function within the legal limits. That being the case it may be necessary for some modifications in the legislation in order to restrain the activity of payday companies.
The issues payday lenders face includes restricting the publicity of the loans, imposing higher standards for approving loans and decreasing the rates. It might be useful to raise awareness on the profit that such companies make.
This could help consumers realize that they are being ripped off and wonder whether or not this is the only solution for them. Though such measures might seem severe and somehow out of line they are imperative in order to restore a balance in the lives of the struggling citizens.