A report is being put together detailing types of high cost credit but according to recent reports bank charges will not be included in this report.
The report forms part of the Office of Fair Trading enquiry into costly credit, and will include things such as pay day loans, doorstep lenders, and pawnbroking, all of which have been subjected to increased scrutiny, but the topic of bank charges has only be skimmed over as part of the report.
The report from the OFT enquiry is set to be published next month, according to reports, but some of the lenders that have been included in the report have described it as a ‘witch hunt’.
Providers of pay day loans have expressed disappointment with the OFT’s decision not to cover bank charges and instead focus on pay day loans and other types of credit.
The report, when released, it expected to highlight the astonishing levels of interest that can come with some types of borrowing, with some non-mainstream lenders charging up to 500 percent interest on a one year loan and some pay day lenders’ interest rates working out to between 1000 and 2000 percent.
At the time the OFT started into probe into high cost borrowing it had been expecting to win its High Court case against the banking industry with regards to bank charges.
One industry group, the BCCA, said that bank charges should have been included in the report, and the group said: ‘We are disappointed that the OFT will not be carrying out a thorough examination of the true cost of current account overdrafts.’
Tags: Loan, Office of Fair Trading, high cost credit, year, bank charges, overdrafts‘This is particularly significant, because the banks are exempted from having to quote APRs on overdrafts, whereas other short-term lenders are compelled to do so.’
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