ANGUS MACDONALD MSP CALLS FOR MORE ACTION ON PAYDAY LOANS TO PROTECT CONSUMERS
Wednesday, 09 November 2016 14:52
Angus Macdonald MSP has backed calls from a national debt advice charity for the Financial Conduct Authority to look at tightening the regulations around the payday loan market.
The call, made today, after a report published by StepChange Debt Charity, the UK’s largest debt advice charity, found that regulations had “not fixed” the payday lending market, with some payday loan providers still not engaging in best practise.
Last year, 7.8% of those who contacted StepChange Debt Charity from Falkirk East had a payday loan debt, with their average payday debt balance at £768.00. Although the charity has reported less and less people seeking help with payday debt, those who are turning to payday do not always get a fair deal.
Commenting Angus Macdonald MSP said:
“This report is another indictment on the payday loan culture we have seen evolve over the last few years and, although there have been regulations put in place, clearly these are not stringent enough to protect consumers.
“The FCA should be carrying out further investigations to ensure the regulations are strong enough, and give consumers the best possible chance at a fair deal. Ultimately it would be a positive outcome if the need for payday loan companies were to be a thing of the past, where people were paid a living wage, however until such times as that is the case, these companies and the regulations governing them should be a cast iron guarantee that the consumer is treated fairly.”
Stepchange Debt Charity Scotland’s Public Affairs Officer James Stewart said:
“Regulation can make a significant difference to broken markets and FCA action over the last few years has gone some way to fixing the worst excesses of payday lending, but there is clearly still work to be done.
“Poor lending practices and the poor treatment of people in financial difficulty have serious consequences. They trap people in a cycle of repeated borrowing and as their balances continue to mount, so does the stress and anxiety that comes with severe problem debt.
“It is essential that the FCA review of the payday lending cap is broad enough to fix areas of consumer detriment and poor lending practices. There is also a clear and immediate need for the Government to examine more affordable forms of borrowing for financially vulnerable people, who are often left with nowhere else to turn in their hour of need
“Debt really can happen to anyone, so that’s why it’s important for the public to know that there are free debt advice organisations out there like StepChange Debt Charity who can help.
“If you are borrowing to cover your household bills, or stuck in a cycle of minimum payments, the time to act is now.”