The Payday lending industry is facing fresh calls for a regulatory crackdown. Commentators are urging the signing up to a new Charter to stop the current lenders potentially ripping-off its customers by requesting that the government do more on short-term loans.
Lenders, often charging annual interest rates of 5,000% or more, will be regulated by the Financial Conduct Authority from April 2014 which has outlined new rules for the sector. These include limiting the number of times a loan can be extended and how many attempts a lender can make in order to recover payments from a borrower’s bank account.
“Many believe the rules do not go nearly far enough and are calling for improved affordability checks, a crackdown on advertising and real-time data so lenders have the ability to check if a borrower has other loans,” said Gerald Irwin of Sutton Coldfield based Licensed Insolvency Practitioners and Business Advisers, Irwin Insolvency.
The Charter has cross-party support and the backing of a number of debt charities, who have reported growing numbers of people experiencing difficulties with repayments.
Debt charities are being inundated with people in financial trouble and perhaps it is time for the industry to be reined in.