Loan Sharks v. Short‐term Lenders: How Do the Law and Regulators Draw the Line?

Abstract

With the Office of Fair Trading (OFT) having just published its ‘comprehensive review’ of some aspects of the business of short‐term lenders, this article examines the phenomenon of short‐term lenders. It draws on the legal and conceptual changes in the United Kingdom's consumer credit sector that have aided their proliferation. It argues that short‐term lenders in their current form are no different from loan sharks and that the current legal and regulatory framework has failed to provide the required protection for vulnerable credit consumers. It highlights how the United Kingdom's legal approach to consumer protection has been to the detriment of short‐term borrowers.