OFT Investigates Payday Loans Sector

The consumer watchdog has launched an “extensive” investigation into the payday loans sector on concerns that some payday lenders may be taking advantage of people in financial difficulty.
As part of the review by the Office of Fair Trading (OFT), 50 of the biggest players in the industry will face spot on-site inspections.
Increasing pressure on household finances has helped fuel the rise of short-term, high-interest lenders but the OFT is concerned that some people are being given loans without the proper checks being carried out.
It will investigate whether firms target people unsuitable for credit, or roll over the loans so that the charges escalate to the point where they become unaffordable.
The OFT’s director of consumer credit David Fisher said: “We are concerned that some payday lenders are taking advantage of people in financial difficulty, in breach of the Consumer Credit Act and not meeting the standards set out in our guidance on irresponsible lending. This is unacceptable.
“We will work with the trade bodies to drive up standards but will also not hesitate to take enforcement action, including revoking firms’ licences to operate where necessary.”
The regulator has already written to several financial trade bodies about concerns over payday lenders’ advertising standards after assessing 50 websites.
The Consumer Finance Association (CFA), which was one of the trade organisations contacted and represents several large payday lenders, said the OFT’s approach was “absolutely right”.
“We have to identify areas of mal-practice and stamp it out. We know that there are payday lenders around who are less than transparent in their advertising and do not carry out the right levels of financial checks, in fact some of them brag about that, but they are not and will never be members of the CFA,” chief executive John Lamidey said.
“Research shows that payday loans have a valuable role to play in today’s society and meet a real need for consumers who like the short term, limited nature of the loan and want to avoid borrowing larger amounts over long periods of time.
“So the OFT’s review, by clamping down on poor quality payday lenders, will be good for consumers and good for our industry.”
The Consumer Affairs Minister Norman Lamb has also welcomed the review.
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Travel mag targets the ‘young, sexy and broke’

A popular DUMBO-based travel website for young globe-trotters on a tight budget is veering offline and onto the magazine rack.
Offtrackplanet.com – an online travel magazine geared toward the “young, sexy and broke,” – will sell copies of their magazine for the first time in more than 300 stores nationwide – including Barnes and Noble.
It’s an unususal step at a time when print publications are slashing budgets and even folding to go digital.
“Print still establishes some credibility. Anyone can slap together a website,” said company CEO and cofounder Freddie Pikovsky, 28.
The quarterly magazine – which will retail for $4.95 and hit newsstands on January 4th – is just as edgy as the site. The latest issue features stories on Paris’ finest sex shops; how to haggle with street vendors abroad and the best places to get tanked with locals in Madrid.
Pikovsky – who was born to Russian immigrants in Bensonhurst – said his life changed on a European backpacking trip in 2008 and hopes the website and magazine’s party atmosphere will inspire people to travel.
“I had all these misconceptions that traveling was reserved for people who were wealthy and that it was a waste of time,” said Pikovsky. “I want to inspire other people to experience something that could change their world.”
The site first launched in 2009 from Pikovsky’s Sunset Park apartment after he met his partner Anna Starostinetskaya, 28, in a Bedford-Stuyvesant hostel. Starostinetskaya – an immigrant from the Ukraine who grew up in Los Angeles – said studying abroad in Spain for six months in 2004 changed her life.
“We talk a lot about the partying and the sex culture but it’s not our job to give people a motive,” said Starostinetskaya. “It’s our job to inspire them.”
Officials for book giant Barnes and Noble said 200 of their stores will sell Off Track Planet magazine and will feature it in their top travel markets.
“We believe it’s a great quality magazine that meets our standards for sale in our store,” said newsstand vice president, Theresa Thompson. “We think it’s edgy and will appeal to a young traveler.”
Despite the foray into print, the tech-first company is working on a sophisticated mobile app that will allow backpackers to connect with experienced travelers and access content from the website. Pikovsky said the company is short about $800,000 to make the app work and is looking for donations from investors.
“We want to reinvent travel guides” said Pikovsky. “We like to say we’re creating movement around the world.”
for more information, visit www.offtrackplanet.com
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