Email Campaign

The payday lending market is not operating as it should. Consumers are bearing the brunt and this cannot continue.
The Financial Conduct Authority (FCA), which takes over responsibility for regulating consumer credit from next April, has proposed tough new rules for payday lending to help those consumers most at risk of harm from poor business practices.

I agree that loans should not be given to people who cannot realistically afford to pay them back. Too few lenders check customerís other financial commitments, including bills and other loans before lending to them. The FCA will have stronger powers to enforce guidance that lenders do this properly.

New rules will also limit the number of times a lender can access your account to just twice over the course of the loan and limit the number of times you can rollover a loan to two. Lenders will also have to prove rolling a loan over once is in the customerís best interest, the customer will have to agree and be given information on accessing free debt advice.

The FCA will also tackle the problems around the advertising of payday loans. This includes making adverts include a warning reminding potential customers many people do not pay back loans on time and that this is costly. Adverts will also include a line directing customers to free, independent debt advice and the FCA will have the power to ban misleading adverts.

These measures will be good for consumers overall and will clearly signal to lenders that if they do not get their houses in order now, so they are fair on the hardworking people who use them, they will face severe consequences. Also, once the FCA takes over responsibility for the consumer credit market it will be able to consider whether other measures will be helpful to consumers.

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