Payday loan charges cap announced by FCA

It has been announced by the City regulator that a cap on the amount that payday lenders can charge their customers is being introduced.

Payday loan rates will be capped at 0.8% of the amount borrowed a day, said the Financial Conduct Authority (FCA).

In total, no one will have to pay back more than twice what they borrowed, and there will be a £15 cap on default charges.

The regulator has said the changes will come into force in January.

“For people who struggle to repay, we believe the new rules will put an end to spiraling payday debts,” said FCA chief executive Martin Wheatley.

Source: www.bbc.co.uk/news

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Rip-off Payday Loan Broker Warning

Consumers are being cautioned to be wary of “rip-off” payday middlemen, after the NatWest bank stated that it is receiving hundreds of new complaints a day.

NatWest reported that they were receiving up to 640 complaints a day in July and August.

Customers are often unaware that they have even authorised a payment and the money is being taken by payday loan middlemen.

It is thought the regulator, the Financial Conduct Authority (FCA), is now looking closely at such activities.

In the meantime, the Financial Ombudsman has repeated a warning that consumers should be vigilant.

It said it had received 11,500 complaints about “rip-off” loan brokers since April, more than double the number in the whole of last year.

Source: www.bbc.co.uk/news/business

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