Local MP Jo Swinson is pleased that new rules clamping down on payday lenders will give local people more protection against unscrupulous behaviour by these companies. Jo pushed for and achieved these changes in her role as Consumer Minister.
From today, payday loan companies will come under tighter rules overseen by the Financial Conduct Authority. Payday firms must now include risk warnings in any advertising on television or in print. They will also be banned from rolling over a loan more than twice and they will have strict limits on accessing people’s bank accounts for repayments.
Commenting on the new rules, Jo said:
“Irresponsible payday lenders have caused misery to local people in the past, and I want to ensure consumers are properly protected against companies who target individuals to take out financial products which are not suitable for them.
“As Consumer Minister I tackled this issue head-on with regulators and loans companies. Last year I convened a summit challenging the big players in the industry to face up to the problems and rein in their reckless practices. As a result of tough action by Government and regulators, 25 of the top 50 payday lenders have left the market and a further 3 had their credit licences revoked.
“Wonga have just been ordered to pay £2.6million in compensation to customers following threatening letters from fake law firms to recover payments. It’s this kind of practice which will worry local people, and I am glad we have taken strong action to tackle payday lenders”.