Following the Financial Conduct Authority’s (FCA) announcement of the price cap for payday lenders, Mike O’Connor, Chief Executive of StepChange Debt Charity, said:
“Today’s announcement will help bring the payday lending industry under control. Despite being marketed as helping deal with short-term financial problems, payday loans have made a bad situation worse for hundreds of thousands of people. Good riddance to bad practice.
“The payday lending industry has been beset by problems from the outset, irresponsible lending, debt inflation, aggressive collection practices and multiple loans chief among those problems. Ensuring that the reforms announced today are effective will require careful monitoring and rigorous enforcement by the FCA.
“These rules address problems associated with the supply of payday loans, but we also need to address the demand for such harmful financial products. We see every day how payday loans have become the last resort for the financially desperate. Credit is rarely the answer to financial problems. We need better options for those struggling with the burden of debt – this is now the challenge for policy makers, creditors and the voluntary sector.”
It’s important to know that payday loans are not a debt solution and can make your financial situation worse. If you're struggling with payday loan debt we can help.