Local MP and Consumer Minister Jo Swinson has announced fresh plans to tackle unscrupulous practices in the payday lending market after evidence shows that problems in the industry are harming consumers.
Payday lenders could face new restrictions on how they advertise and a new code of practice Jo announced last week.
The Office of Fair Trading (OFT) will immediately start tackling irresponsible practices by payday lenders and will look at whether to refer the payday lending market to the Competition Commission
The Financial Conduct Authority (FCA), which will take on the regulatory responsibility of payday lending in April 2014, have also said they will consider whether there are gaps in regulation that need to be addressed and they have confirmed that existing OFT guidance will be turned into rules that are binding on firms.
In addition the Government will begin immediate work with the industry and regulators to clamp down on advertising of payday loans and are strongly pressing for the industry to improve compliance with payday lending codes.
Commenting Jo said:
“The evidence of the scale of unscrupulous behaviour by payday lenders and the impact on consumers is deeply concerning.
“The industry’s actions are completely unacceptable and we are taking serious steps to tackle the issue immediately as well as paving the way for tougher and more rigorous regulation in the future.
“The Coalition Government is determined to make sure that consumers are properly protected and that payday lenders stop taking advantage of vulnerable people.
“I’ve had a number of local residents write to me with their concerns on this issue and I’m proud that the Government is working hard to ensure payday lenders do not lure consumers into taking out payday loans that are not right for them.”