Payday lenders face tighter controls, but no cap on interest rates

Payday lenders told to clean up their act 150 pxThe Financial Conduct Authority (FCA) is proposing tough new rules for payday lenders following concern over the way some are operating. However, the regulator has fallen short of capping the interest rate lenders will be able to charge, a decision which will frustrate many who have campaigned for the change. FCA payday loan proposals The proposals include: Forcing payday lenders to put risk warnings, similar to those used for mortgages, on their adverts, highlighting ...

Payday borrowers choose not to complain

Payday lenders told to clean up their act 150 pxCitizens Advice has revealed 76% of 665 cases it has seen recently could have been passed to the Financial Ombudsman Service (FOS), with many payday lenders allegedly collected repayments unethically. Examples of poor practice included:    Consumers chased for payments on loans they never took out Consumers “pestered” by phone calls and texts, despite having a repayment plan in place Possible fraud Consumers suffering from financial hardship being treated unfairly Following recent controversy over the tactics employed by some payday lenders, many ...

Warning for payday loan companies

The payday loan industry faces fines and closures if it does not improve the way it does business. An interim report by the Office of Fair Trading (OFT) says that many payday lenders are not operating by the rules particularly when it comes to lending policy and the collection of debts. The full report will be published in February when the OFT has completed its’ investigations, however the interim report, published yesterday, has fuelled concerns about the practices of some payday lenders. Payday lender concerns The interim report comes after the OFT visited the 50 largest payday loan lenders, but it will be expecting ...