Wired-GOV Newswire (news from other organisations)
CAB - Cap on the cost of credit will help fight exploitative payday lending
The cap on the total cost of credit is an important step towards protecting consumers from the debt trap of excessive interest rates and charges, says Citizens Advice.
Today, the Financial Conduct Authority, which regulates payday lenders, has announced a 100 per cent cap of the total cost of credit, meaning that from January no borrower will have to pay back more than double their original loan.
Gillian Guy, Chief Executive of national charity Citizens Advice said:
“This cap means payday lenders can no longer force borrowers into an endless spiral of debt. This is a real improvement. People have sought help from Citizens Advice after their payday loan of £300 ballooned to over £2,500 worth of debt. The cap will help to stop these serious cases in which sky high interest and extortionate fees turn a small loan into an unmanageable debt.
“This is a step towards fixing a market that hasn't been working for consumers. Payday loan firms should only lend to people who they know can afford to pay back the debt, and must point those who can’t towards free debt advice.
“People who are in a position to borrow need a responsible short-term credit market. A vital part of this is greater choice. High street banks should seize the opportunity to meet demand and offer their customers a better alternative to payday loans.
“The FCA should monitor the cap, including whether it is set at the right level, to make sure it is working for consumers. They must also keep a close eye on whether lenders are sticking to the rules. Problems with high cost credit go well beyond payday loans. We’re concerned about the serious problems people are reporting with products like logbook and guarantor loans. As the new rules force payday lenders to treat customers more fairly, these other areas must be given more attention."
Every working day Citizens Advice Bureaux help with 100 new problems caused by payday loans.
Analysis of 30,000 of the most serious debt cases found that young people were more likely use short term credit than other kinds of borrowing. Sixty two per cent of 17-25 year olds who use high cost credit and have come to Citizens Advice with a debt problem used payday loans.
Between April and August this year, Citizens Advice payday loans tracker found that:
•19% of people were told how to get free debt advice
•26% were treated sympathetically by their payday lender if they ran into difficulty
•22% were made aware of the risks of extending a loan
•Just half were asked any questions about their finances before being given a loan.
Earlier this year, our Freedom of Information request to the HM Courts and Tribunals Service showed that the number of logbook loans taken out this year was on track to reach 60,000, up 61% from 2011. This is based on 10,000 loans registered with the courts service in January and February this year.
Notes to editors:
- This year the Citizens Advice service celebrates its 75th anniversary. We’ve planned a year of activity running from January to December 2014. Contact the press office on 03000 231 080, or via email at firstname.lastname@example.org, to find out more.
- The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
- The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
- You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
- Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 6.6 million problems from April 2012 to March 2013. For full 2012/2013 service statistics see our quarterly publication Advice trends
- Citizens Advice service staff are supported by more than 22,000 trained volunteers, working at over 3,000 service outlets across England and Wales.
Latest News from
Wired-GOV Newswire (news from other organisations)
One in ten public sector key workers in Yorkshire and Humber have taken steps to change profession – new TUC poll22/10/2021 15:43:00
One in 10 (9 per cent) key workers in the public sector in Yorkshire and Humber have already taken steps to change profession, and a further two in 10 (18 per cent) are “actively considering” quitting, according to new TUC polling published yesterday (Thursday).
CBI warns Government that next week's Budget must tackle a fundamental inconsistency in its economic strategy22/10/2021 14:43:00
The CBI is today (Friday) warning the Government against new business tax rises in next week’s Budget (and Comprehensive Spending Review) or face dampening the economic recovery and undermining its broader strategy.
Manufacturing activity remains firm, but supply pressures mount - CBI Quarterly Industrial Trends Survey22/10/2021 12:15:00
UK manufacturing output volumes in the quarter to October grew at a similarly firm pace to September, according to the latest quarterly CBI Industrial Trends Survey.
Buy Now Pay Later borrowing can be like quicksand, warns Citizens Advice21/10/2021 16:40:00
Citizens Advice responds to the announcement of a consultation on the regulation of Buy Now Pay Later.
One in four public sector key workers in East Midlands “actively considering” quitting – new TUC poll21/10/2021 16:05:00
Toxic mix of low pay, excessive workloads and a lack of recognition pushing public sector key workers to the brink, warns TUC.
Climate promises destined to fail without Treasury commitment to net zero test - WWF analysis21/10/2021 15:40:00
Ahead of the Government’s Spending Review and less than a fortnight before world leaders will gather for COP26, WWF is urging the Chancellor to ensure that the UK delivers on its climate promises by applying a Net Zero Test to ensure spending and taxation decisions help protect the planet and create jobs, instead of contributing to dangerous climate change. This must build on the Net Zero Strategy from government to make sure spending is aligned with its plan to reduce emissions.
One in four public sector key workers in South West “actively considering” quitting21/10/2021 15:18:00
A quarter (24 per cent) of key workers in the public sector in the South West are “actively considering” quitting and changing profession, according to new TUC polling published today.
LGA - Councils respond to Health Secretary COVID-19 press conference21/10/2021 14:40:00
Cllr James Jamieson, Chairman of the Local Government Association, responded to the COVID-19 update by Health and Social Care Secretary Sajid Javid
NHS Confederation - Better to act now rather than regret it later21/10/2021 13:40:00
Matthew Taylor responds to the Secretary of State’s comments at the latest Downing Street press conference.