The rapid expansion of the payday loan sector has been accompanied by a significant increase in the number of people experiencing serious debt problems which suggests people should think carefully before taking out such loans. Furthermore the number of payday loan adverts seen by 4-15 year olds has increased from 3 million in 2008 to 596 million in 2012. The Committee's recommendations include: all payday loan companies should be required to resubmit their affordability tests to the FCA for approval before they can continue in the sector and the FCA should make clear that if real-time data sharing has not been established by July 2014 it will mandate its use as a condition of trading in the sector; a limit should be set of one roll-over per payday loan; Payday lenders should be required to give 3 working days notice before using a continuous payment authority [CPA] and each notice should set out the right of a customer to cancel the CPA; the FCA should discuss with the Information Commissioners Office how texts on payday loans could be disaggregated to identify the extent of bad practice and if this evidence base demonstrates inappropriate targeting or marketing, the FCA should move to ban all brokering of payday loans through email, texts and other personal mobile devices; when payday loans come under the authority of the FCA, they will be subject to a levy which should be ring fenced by the Money Advice Service solely for the funding of front-line debt advice servicesI am not going to say the OFT approved that; it was one of the things that we changed in light of the OFT review. ... If you apply for a credit card, the application process would be as long as if you were applying for a short-term loan. ... the speed of getting the money as a tool to draw people in comes the recommendation or regulation that you have to promote the APR as prominently as you possibly can.
|Title||:||House of Commons - Business, Innovation and Skills Committee: Payday Loans - HC 789|
|Author||:||Great Britain: Parliament: House of Commons: Business, Innovation and Skills Committee|
|Publisher||:||The Stationery Office - 2013-12-20|