“Interest rate cap on payday loans may harm consumers” - Financial Conduct Authority

In the first of a series of papers examining how people make financial decisions, the new Financial Conduct Authority (FCA) has warned that capping interest rates on payday loans could make it harder for some people to access any kind of credit.

The report, which looks at how consumers choose and use financial products, also challenges the conventional “buyer beware” approach to the risks consumers face.   It suggests that some patterns of behaviour can lead to firms competing in ways that are not in the interests of consumers.

The FCA came into being on 1 April 2013 and is responsible for supervising the conduct of all regulated financial companies.  Its objectives are to  protect consumers, to protect and improve the integrity of the UK’s financial system and to promote effective competition in the interests of consumers.

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To read the FCA report, click here