FCA cap on payday loans saves consumers £150 million per year

The Financial Conduct Authority (FCA) has published a report that claims that its regulation of high-cost short-term credit providers has delivered substantial benefits to customers

 
The organisation assessed the effectiveness of the payday loan price cap which it introduced in 2015. The review found that as well as saving borrowers money, the new rules meant that payday firms were much less likely to lend to customers who cannot afford to repay the loan.
 
The price-cap will remain in force until another review takes place in 2020.
 
 David Rodger, CEO of Debt Advice Foundation said;
 
“We are definitely seeing fewer clients with debt problems tied primarily to high-cost short-term credit, or ’pay-day loans’ which is a very positive result. However as our figures show, credit card debt is still a grave and long-term concern. The report also highlighted the staggering cost of unarranged overdrafts.
 
“The FCA is making great strides in ensuring the credit market works for everyone and we look forward to seeing what steps they take in the future.”
 
Andrew Bailey, Chief Executive of the FCA, said: 
 
“We are pleased to see clear evidence of improvement in the payday lending market after a period when firms’ treatment of customers and their business models were often unacceptable.  
 
“However, there is more that we can do, and this review is about identifying the areas where consumers may be suffering harm so that we can focus our efforts accordingly.”