“Hope for millions of borrowers stuck in a cycle of debt” – Which? response to the FCA announcement on a price cap for payday lenders

In response to the Financial Conduct Authority’s announcement on payday lenders Which? executive director, Richard Lloyd, said:

“Today the regulator offers hope for millions of borrowers stuck in a cycle of debt, by confirming their plans to rein in the cost of payday loans and crackdown on excessive default charges.

“In the meantime the FCA must keep the cap on the cost under review and tightened up further if it doesn’t work as intended.”


In Credit Britain 2, our most recent report on the credit market, we found:

  • Around 2.5 million people, approximately the same number as those that have used a payday loan, say they have used an unauthorised overdraft in the last 12 months
  • UK consumers’ total unsecured debt remains considerable at £158 billion

We also identified further action for the Financial Conduct Authority:

  • Ensure lenders provide clear, transparent, easily comparable information
  • Put borrowers in control of their credit
  • Crack down on irresponsible lending – including withholding or withdrawing authorisation for firms that are found to have business models that rely on irresponsible lending or customers defaulting
  • Ban excessive default fees and charges
  • Swift, early and effective intervention for people in financial difficulty

Statement: , ,