Payday lending industry must now take action

15 May, 2013

In response to the Consumer Finance Association’s report on the payday lending sector, Delroy Corinaldi, director of external affairs for StepChange Debt Charity, said: 

“It is welcome news that the Consumer Finance Association (CFA) recognises that there are problems within the payday industry. The CFA must now show that it is prepared to match its rhetoric on addressing these failings with strong actions targeting those lenders who fail to adhere to industry codes of practice.

“The Office of Fair Trading (OFT) uncovered widespread evidence of irresponsible lending, the fact that the average amount owed on payday loans by StepChange Debt Charity clients (£1,657) is more than their monthly take home pay (£1,320) is testament to that.

“StepChange Debt Charity wants to work with the sector to ensure that payday loans do not become a last resort for vulnerable borrowers. Suitable affordability checks, identifying those in financial difficulty and signposting people to free debt advice are crucial steps to ensuring consumers are protected from poor industry practice.”