BBC documentary reveals payday loan concerns

BBC documentary reveals payday loan concerns

A documentary by the BBC, to be screened tonight, claims that payday loan company Provident Financial has made multiple loans to a vulnerable woman diagnosed with mental health problems.

The Panorama documentary, Debt on the Doorstep, claims that Provident Financial loaned thousands of pounds to the woman, who has been diagnosed with schizophrenia.

During the BBC’s undercover investigation into the company, an agent acknowledged that the customer was “not all there”, and the woman’s mother told the BBC that it was obvious that her daughter was unwell.

As a result of the investigation, the Citizens Advice Bureau has accused Provident Financial of lacking social responsibility.

Under guidelines issued by the Office of Fair Trading (OFT), borrowers who may be particularly vulnerable because of their age, health or disability must not be targeted or exploited.

Provident Financial has issued a pre-broadcast response to the programme saying: “Provident would never deliberately lend to someone who it believed did not have the mental capacity to understand the credit agreement they were signing up to.

“However, we do not discriminate against those who may have some form of mental illness yet who do have the mental capacity to understand their credit agreement.

“We follow the OFT’s guidelines in this respect by not discriminating against those with mental illness while not entering credit agreements with those we believe lack the mental capacity to understand the terms of their agreement.”

The company has not yet seen the BBC documentary and plans to issue a full response after it has had the opportunity to view the programme.

It is only a few weeks since a code of practice was issued to help ensure that payday loan companies conduct their business in a responsible manner.

The OFT launched a compliance review of the payday lending sector in February and is currently gathering information about the sector.

It is also investigating if companies are complying with the code of practice and with the Consumer Credit Act.

The full results of the investigation and the OFT’s recommendations are expected towards the end of the year.

source: www.financemarkets.co.uk