Friday 2nd January, 2015
As the new cap on payday loans, introduced by the Financial Conduct Authority, comes into force today, Mike O’Connor, Chief Executive of StepChange Debt Charity, said:
"Today ought to herald a new chapter for payday lenders and their customers, with more responsible lending and less detriment to consumers. But the FCA must be watchful that new products and practices don't emerge that circumvent the cap.
“Caps on interest and charges are welcome, but on their own they only deal with part of the supply side of the problem, not the demand.
“Every week, more than 10,000 people come to us in financially desperate situations. Millions are living on the edge of falling into problem debt, and these people need much more support so that short-term high-cost credit is not seen as the best, or indeed only, answer.
“The economy is growing but 2015 will still be tough for many. We need a comprehensive action plan to tackle problem debt and help 2.9m individuals and their families in severe problem debt get back on their feet."