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Is this the end of payday lenders?

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Payday loan companies which charge interest rates of thousands of per cent a year could be about to go out of business, according to industry experts.

The announcement came after it was revealed Wonga, the largest payday lender, saw its finances drop £35million into the red after being forced to write off hundreds of thousands of loans.

Tougher regulations, and a cap on the amount of interest the firms can charge per day, means that Wonga's disastrous result is likely to be mirrored across the industry later this year.

Richard Lloyd, executive director of Which?, told The Telegraph: 'The payday lending industry has been rife with bad practice and if tougher rules are costing lenders their profits, that's a good sign that fewer people are being tempted into expensive loans and fees they can't afford.'

Payday lending firms rose to prominence following the financial crash, and at its peak in 2013 the industry was worth an estimated £2billion.

However, its extortionate fees attracted opponents, including Archbishop of Canterbury Justin Welby, who promised to set up his own credit unions to compete the lenders out of business.

Mr Welby, who has served on the parliamentary Banking Standards Commission, even met Wonga boss Errol Damelin in order to tell him.

Wonga was forced to pull its television advertising after profits fell, due in part to tougher regulations, and the need to write off hundreds of thousands of loans

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I am not sure why people go in to debt with credit cards charging 29 to 32% interest much less getting a payday load that has interest rates astronomically higher than criminal loan sharks charge. I mean Dam!

Edited by Robert50

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