Press release:

Cap on payday lending is welcome, but more still needs to be done

The Financial Conduct Authority has today announced a cap on payday lending. Commenting on this, Jafar Hassan, personal finance expert, at uSwitch.com, says: “The FCA has shown payday lenders that it has teeth – now it needs to show just how hard it can bite. These unscrupulous lenders need to be held accountable and made to adhere to the same transparency we would expect of any other financial services provider. The regulator needs to ensure that robust eligibility checks are in place and that vulnerable customers are treated fairly if they get behind with their repayments.

“Payday lenders have an important role to play in providing short-term credit, our research shows that almost half of customers (49%) who have taken out a payday loan say the experience was positive.

“However, it is important that the issues around the lack of adequate credit checking and providing support to those who end up in financial difficulties are addressed. As we’ve seen in recent weeks, huge lenders such as Wonga have resorted to using sinister practices of chasing up debt, and the FCA needs to set a precedent that these practices are simply unacceptable. Sorting out these problems will do even more to protect vulnerable consumers.”

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