StepChange Debt Charity responds to Financial Conduct Authority review of debt collection practices

12 March, 2014

In response to the Financial Conduct Authority’s (FCA) announcement of a review of debt collection practices by payday lenders, Mike O’Connor, Chief Executive of StepChange Debt Charity said:

“Today’s announcement by the FCA sends a clear message to the payday lending industry that poor debt collection practices cannot be tolerated.  Time and time again, people struggling with payday loan debts have been the victims of atrocious treatment by lenders. Too often people are being kicked when they are down.”

“Clients tell us that they are subjected to aggressive and threatening calls, adding unnecessary stress and anxiety for those people in difficulty.  Lenders continue to apply excessive interest and charges to the debts of those in difficulty, which can see relatively small amounts of a few hundred pounds escalate to thousands, pushing people deeper and deeper into debt.”

“The FCA’s decision to address this issue is  further evidence that the payday lending industry is not working in the best interests of consumers. While action by the FCA is welcome, lenders should take the initiative to show they are serious about treating customers fairly by accepting reasonable payment offers and sign-posting people to free debt advice. We hope that some payday lenders will take the opportunity to differentiate themselves and treat customers fairly ”