Complaints about payday loans companies have doubled in the last year, but Which? research has found that consumers continue to be offered incentives to take out payday loans.
The Money Advice trust, a debt charity, reports its National Debtline service took over 20,000 calls for help with payday loans during 2012, a record number. In addition, the Office of Fair Trading (OFT) recently announced it was giving 50 payday lenders 12 weeks to clean up their act or lose their credit licences.
But in the same month, Which? research has found that consumers continue to be offered incentives to take out payday loans.
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Payday loans on cashback sites
We carried out a survey of 10 UK cashback sites, including Topcashback and Quidco (together making up 99% of the cashback site market), and found 74 adverts from 27 different payday firms. The cashback offered for payday loans ranged from £3 to £50.50.
We believe cash incentives shouldn’t be offered on borrowing as it could encourage people to take on debt, and create even bigger problems if it can’t be repaid. In fact, Which? research found that payday loan users have double the number of credit products than other users.
Cashback sites defend payday loan listings
Quidco told Which? that payday loans account for less than 1% of its business, but it, along with TopCashback, have no plans to stop offering them.
Both sites said they have policies to not promote payday lenders prominently.
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