New watchdog out for payday lenders blood
The watchdog will be taking over the regulation of credit providers and debt management firms from the Office of Fair Trading.
This is all good and noble to hear, seeing as payday lenders have been taking the piss for far too long, happily shoving borrowers into a debt spiral with ridiculous interest payment demands.
It’s going to also take over the regulation of credit cards, hire purchase, debt management firms and debt advisors.
Speaking to BBC Radio 5 live, Martin Wheatley, chief executive of the FCA said: "Our processes will probably force about a quarter of the firms out of the industry, and that's a good thing, as those are the ones that have poor practices."
Unfortunately, the demand still remains for payday lenders, and so people may be forced to go to even more nefarious types, but the watchdog is optimistic that a cleaning up of various parties acts has been evident, and standards for the customer have improved over the last 18 months.
There have been concerns that payday lenders have been making too much of their profits from people who were struggling to pay the money back. Taking advantage of this situation, the lenders offer loans of hundreds of pounds for a few weeks, but at very high annual rates of interest and with high penalties for failing to repay. The new regime is designed to force them to lend only to those who can afford it.
And if you think that was all guff, the FCA now has tougher powers than the Office of Fair Trading, so now they can dish out unlimited fines, demand refunds and ban misleading advertisements.
Now that can’t be a bad thing. Let’s hope they put their money where their mouth is and sort shit.