Member Article

Payday lenders face new rules

Payday lenders face restrictions on what they can say in adverts, as the Financial Conduct Authority takes over regulation of the sector.

Lenders could be forced to place “risk warnings” on their adverts, along with other information about debt advice.

The new rules could also impact peer-to-peer lending platforms that will be required to outline the risk to borrowers before they take out a loan.

FCA chief executive, Martin Wheatley, said: “We believe that payday lending has a place; many people make use of these loans and pay off their debt without a hitch, so we don’t want to stop that happening. But this type of credit must only be offered to those that can afford it and payday lenders must not be allowed to drain money from a borrower’s account.

“That is why we’re imposing tighter affordability checks, and limiting the use of rollovers and continuous payment authorities.

“Today I’m putting payday lenders on notice: tougher regulation is coming and I expect them all to make changes so that consumers get a fair outcome. The clock is ticking.”

This was posted in Bdaily's Members' News section by Tom Keighley .