Response to new FCA Payday Loan regulations
Press Release - 3 October 2013
Responding to today’s new payday loans regulations set out by the Financial Conduct Authority (FCA), James Benamor, CEO and founder of Amigo Loans, commented:
We’ve long been campaigning for change to the way the credit industry is regulated so it’s a great to see the FCA finally setting out its proposals on how it aims to tackle the deep-rooted problems within the industry. These pay day predators target the most vulnerable out there, and until now they’ve been allowed to get away with it. The industry needs to change for good so consumers don’t find themselves caught up in the clutches of lenders with jaw-dropping interest rates.
Proper affordability checks for all loan applications should ultimately help make sure loans are only given to those than who can realistically afford to pay them back, and limiting rollovers and the number of times a continuous payment authority can be used will also avoid consumer debts spiralling out of control. Yet while today’s news is a step in the right direction, it really is just the tip of the iceberg and so much work remains to be done. Any changes won’t be implemented until April at the earliest and in the meantime pay day lenders will be getting away with it for another six months at least. Change needs to happen as soon as possible to ensure standards are driven up across the industry, and despite the strict fines that will be imposed on those that break the rules, there will no doubt be a handful of lenders who will try their best to get around any legislation imposed. It is now more important than ever for the FCA to not stop here, and to continue cracking down on these crooks.
A fairer, more transparent industry is the ultimate outcome to all of this. Consumers need to be aware of the alternatives out there and not feel pushed down the pay day route because they believe it’s the only solution to their problems. The creation of a not-for-profit, all-of-market loan comparison site, which includes all credit unions, peer-to-peer, payday and other types of lending, is something we would like to see, allowing customers to properly compare the choices available to them.
