Responding to the new payday loans regulations set out by the Financial Conduct Authority (FCA), Richard Lloyd, Which? executive director, said:
“Our research shows millions of people are increasingly reliant on high cost loans to pay for essentials or to repay other debts, so it’s good to see the Financial Conduct Authority planning to take tough action to clean up credit.
“We welcome proposals to tackle unscrupulous payday lenders but we want the regulator to go further and use its full powers to clamp down on problems faced by struggling consumers across the credit market, like sky-high penalty charges.”
Notes to editors:
Which? is collecting evidence from consumers about their experiences of the credit industry at www.which.co.uk/
Which?’s latest consumer tracker, which monitors how consumers are coping with their finances, shows:
· 4% (around 1 million households) take out payday loans each month;
· Nearly half (46%) of people are worried about their household level of debt.
Which? findings on credit have revealed:
· Eight in ten of us (79%) – around 38.5 million adults – use some form of credit
· Four in ten (38%) of people who take out payday loans use them to pay for essentials like food or fuel.
· A quarter (24%) of people with payday loans use it to repay other credit.
· Seven in ten (69%) of payday loan users have regretted taking out credit in the past and half (49%) of payday loan users have taken out credit it turned out they couldn’t repay.
· Three in ten (28%) of credit users say they don’t like debt but see it as a necessary part of their life.
· Nine in 10 (89%) people think that payday loan companies should always include the cost of borrowing in advertising – a similar percentage (87%) think adverts should include prominent text saying that if you are struggling with debt you should get free advice from a debt advice organisation.
The latest information and research on consumer credit and spending can be found on the Which? Consumer Insight Tracker http://
Which? has consumer advice regarding payday loans on its website: www.which.co.uk/
1 Populus, on behalf of Which?, interviewed 2,106 UK adults online between 13th and 15th September 2013. Data were weighted to be demographically representative of all UK adults. Populus is a member of the British Polling Council and abides by its rules
2 Populus, on behalf of Which?, interviewed a random sample of 4,031 GB adults aged 18+ online between 10th and 12th August 2012. Surveys were conducted across the country and the results have been weighted to the profile of all GB adults. All stats referring to credit users are based on 3,195 consumers who said that they use at least one credit product. Populus is a founder member of the British Polling Council and abides by its rules.