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Responsible lender Ferratum welcomes OFT short-term loan investigation

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OFT investigation

What's Happening?

Europe’s largest provider of short-term loans today welcomed the decision by the Office of Fair Trading (OFT) to launch a review of the fast-growing sector in the UK.

Dirk Haro, Regional Director for Ferratum in Western Europe, said: “Responsible lenders such as Ferratum have absolutely nothing to fear from the OFT investigation.

“We would welcome the opportunity to demonstrate the industry-leading procedures and policies we have in place which ensure that we are complying fully with the Consumer Credit Act.

“Ferratum has highlighted in recent weeks the fact that there are rogue lenders operating in our sector and we hope that the investigation will help to expose these operators and help to remove them from the industry.”


The review, announced today, will look at how lenders are behaving in a number of areas, including:

·         Whether they are giving loans without first checking adequately that the borrower can repay them;
·         Inappropriately targeting particular groups of people with clearly unsuitable or unaffordable credit;
·         Rolling over loans so charges escalate and the loans become unaffordable;
·         Not treating borrowers that get into financial difficulties fairly.

Mr Haro said: “There are undoubtedly short-term loan lenders who are regularly falling foul of these and other simple practices of responsible lending.

“But the total opposite is true of companies such as Ferratum which recognises fully the importance of responsible lending.

“A good example of this is that we do not charge any upfront fees and we do not just credit check our customers when they apply for their first loan – we continue to credit check them each time they apply to ensure that their individual circumstances have not changed. We will only lend to customers with a good credit history. We also do not allow customers to roll over their loans.”

Ferratum has predicted that as many as two million people in the UK have taken out short-term loans during the past year. And industry experts are forecasting that by the middle of this year that number will have risen to 3.5million.

The vast majority of Ferratum customers are employed – many holding good jobs – and aged between 30-32. Approximately 60 per cent of customers are female.

Ian Porter, Ferratum UK’s Sales and Marketing Manager, added: “The overwhelming message we are receiving from our customers is that they find a Ferratum microloan far more flexible and responsive to their needs than more traditional lenders. They have a short-term financial requirement – perhaps only £100 or £200 to perhaps pay a utility bill or urgent car repairs – so have no desire to take out more money than they need or have to repay over a longer period. This is responsible borrowing and lending in action.

“Ferratum loans have to be repaid within 45 days and the vast majority of customers repay well ahead of the 45 days. 

“Many short-term loan companies wrongly impose severe rates of interest on customers who default on repayments. However, Ferratum focuses more on ensuring that customers do not default and, should they do so, works with them to help them repay their loans as quickly as possible.

 “It is because of these and other good practices that Ferratum is continuing to grow not just within the UK but globally with a presence now in 18 countries.”


Since this was published, Ferratum has continued to thrive and is now present in 22 countries across Europe, North and South America and Australasia.  The FCA approval was granted in full in early 2016 meaning that Ferratum is fully authorised and regulated by the Financial Conduct Authority.