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CAB - Spotlight on payday loans needs to widen to other forms of high cost credit

As the Competition and Markets Authority announces plans to help people find better deals for payday loans, Citizens Advice has highlighted how other forms of high-cost credit such as logbook loans need to be put under serious scrutiny too.

Citizens Advice Chief Executive Gillian Guy said:

“High fees and late payment charges can make payday loan debts balloon. Payday lenders need to be up front about fees and charges so people know exactly what they'll be expected to pay and if it is affordable. The measures from the Competition and Markets Authority add to the new rules and cap introduced by the FCA. It’s important this stringent approach isn't isolated to just the payday loan market.

“The demand for short term credit won't go away as households struggle to balance the books following years of high prices and stagnant wages. That's why other forms of high cost credit like logbook loans need to be put under the same spotlight.  These firms are charging excessive interest rates and fees and often use bullying tactics to get people to pay money they can't afford.“

Citizens Advice

Notes to editors:

  1. 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.
  2. 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.
  3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
  4. 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
  5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
  6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.
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