MP challenges pay-day lenders to clean up act

The Bill will be introduced tomorrow and debated next month and comes in the wake of growing criticism of companies offering short term loans, often at very high interest rates.

Mr Blomfield, MP for Sheffield Central, said: “Payday money lenders are making millions from extortionate loans to some of the most vulnerable in Sheffield and across the country.

“In hard times, it’s no wonder that people who are struggling will turn to them for help. But the massive interest rates, rip-off charges and misleading advertising of payday lenders are often just pushing people further into debt.”

A report from MPs earlier this year criticised the Office of Fair Trading for failing to take a tougher stance on pay-day lenders.

The OFT complained it lacked the powers to properly regulate the industry.

Mr Blomfield is using a private members’ Bill to try to bring in tougher rules on the way companies advertise, to limit how much they can lend and to cap their charges.

MPs’ put their names into a ballot at the start of each Parliament for the right to introduce a Bill and Mr Blomfield was second on the list of 20 picked out in May.

Private members’ Bills are an opportunity for MPs to raise issues they feel are important but often need to win Government support if they are to become law.