This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.guardian.co.uk/money/2013/mar/06/payday-lenders-face-advertising-restrictions
The article has changed 5 times. There is an RSS feed of changes available.
| Version 3 | Version 4 |
|---|---|
| Payday lenders face advertising restrictions | Payday lenders face advertising restrictions |
| (4 months later) | |
| Ministers are to announce a clampdown on adverts for payday loans, but have rejected a cap on the cost of loans despite a report due to be published on Wednesday from the Office of Fair Trading showing widespread malpractice across the controversial industry. | Ministers are to announce a clampdown on adverts for payday loans, but have rejected a cap on the cost of loans despite a report due to be published on Wednesday from the Office of Fair Trading showing widespread malpractice across the controversial industry. |
| Ministers have already legislated to allow a cap, but will not impose one now after reading a report from the University of Bristol showing a cap on the cost of credit might reduce competition. | Ministers have already legislated to allow a cap, but will not impose one now after reading a report from the University of Bristol showing a cap on the cost of credit might reduce competition. |
| The government will say they are prepared to impose a cap if market conditions change. Responsibility for a cap passes to to the new Financial Conduct Authority which takes responsibility for consumer credit in April 2014. | The government will say they are prepared to impose a cap if market conditions change. Responsibility for a cap passes to to the new Financial Conduct Authority which takes responsibility for consumer credit in April 2014. |
| The Labour MP and long-term campaigner against loan sharks Stella Creasey said the likely government response is going to be very disappointing given the scale of misselling the OFT report is likely to show. She accused the government of continually dragging its feet, and doing little to develop an alternative industry built around the credit unions. | The Labour MP and long-term campaigner against loan sharks Stella Creasey said the likely government response is going to be very disappointing given the scale of misselling the OFT report is likely to show. She accused the government of continually dragging its feet, and doing little to develop an alternative industry built around the credit unions. |
| A cost cap would "set a ceiling" on different kinds of loans to help customers, and be more effective than implementing a cap on interest rates for every loan, Creasey argues. | A cost cap would "set a ceiling" on different kinds of loans to help customers, and be more effective than implementing a cap on interest rates for every loan, Creasey argues. |
| The OFT was reluctant to reveal the contents of the year-long inquiry ahead of publication, but indicated that concerns expressed in an interim report have not gone away. | The OFT was reluctant to reveal the contents of the year-long inquiry ahead of publication, but indicated that concerns expressed in an interim report have not gone away. |
| Ministers are to focus on a clamp down on payday lender advertising including "wealth warnings" on adverts, limiting the times the companies advertise and forcing firms to make sure their APR is displayed. | Ministers are to focus on a clamp down on payday lender advertising including "wealth warnings" on adverts, limiting the times the companies advertise and forcing firms to make sure their APR is displayed. |
| The advertising restrictions, to be discussed with the Advertising Standards Authority, will be set out by consumer minister Jo Swinson and treasury minister Sajid Javid. Swinson will call the industry into meetings to discuss greater responsibility in its advertising. | The advertising restrictions, to be discussed with the Advertising Standards Authority, will be set out by consumer minister Jo Swinson and treasury minister Sajid Javid. Swinson will call the industry into meetings to discuss greater responsibility in its advertising. |
| In November the government received the Bristol report on payday loans on the impacts of a possible cap on the total cost of credit. But it has been waiting for publication of the full OFT report to act. | In November the government received the Bristol report on payday loans on the impacts of a possible cap on the total cost of credit. But it has been waiting for publication of the full OFT report to act. |
| The FCA has already committed itself to prioritising payday regulation and advertising problems immediately. | The FCA has already committed itself to prioritising payday regulation and advertising problems immediately. |
| A consultation will also be published setting out how the FCA will work and the powers it will have to make sure consumers are protected in this market. | A consultation will also be published setting out how the FCA will work and the powers it will have to make sure consumers are protected in this market. |
| Its rules will be binding, and if those rules are broken, it will have strong enforcement powers including fines and the ability to get consumers their money back. | Its rules will be binding, and if those rules are broken, it will have strong enforcement powers including fines and the ability to get consumers their money back. |
| The FCA's new regime will make sure that lower risk firms pay lower fees and have fewer restrictions on them. | The FCA's new regime will make sure that lower risk firms pay lower fees and have fewer restrictions on them. |
| The Bristol report research shows that a cap on credit is not the right answer at this time, but if this were to change due to market conditions, the FCA will have powers to look at this again and enforce a cap if they then think it is the right thing. | The Bristol report research shows that a cap on credit is not the right answer at this time, but if this were to change due to market conditions, the FCA will have powers to look at this again and enforce a cap if they then think it is the right thing. |
| Swinson said: "We are clear that no-one should be lured into using payday lending, and people should have the tools to make informed decisions about the help on offer. When consumers are in financial need, we are absolutely committed to making sure they are not taken advantage of or harmed. | Swinson said: "We are clear that no-one should be lured into using payday lending, and people should have the tools to make informed decisions about the help on offer. When consumers are in financial need, we are absolutely committed to making sure they are not taken advantage of or harmed. |
| "We are taking serious steps to tackle the issue immediately, while also paving the way for tougher and more rigorous regulation of this industry further on". | "We are taking serious steps to tackle the issue immediately, while also paving the way for tougher and more rigorous regulation of this industry further on". |
| Payday loan companies, such as QuickQuid, Wonga and Payday UK, have drawn heavy criticism for charging annual interest rates of up to 4,000% a year. | Payday loan companies, such as QuickQuid, Wonga and Payday UK, have drawn heavy criticism for charging annual interest rates of up to 4,000% a year. |
| The firms have been accused of enticing those who cannot borrow elsewhere due their weak finances further into debt. | The firms have been accused of enticing those who cannot borrow elsewhere due their weak finances further into debt. |
| The interim OFT report published in November highlighted concerns about the "adequacy of checks made by some lenders on whether loans will be affordable for borrowers, the proportion of loans that are not repaid on time, the frequency with which some lenders roll over or refinance loans, the lack of forbearance shown by some lenders when borrowers get into financial difficulty and finally the debt collection practices". | The interim OFT report published in November highlighted concerns about the "adequacy of checks made by some lenders on whether loans will be affordable for borrowers, the proportion of loans that are not repaid on time, the frequency with which some lenders roll over or refinance loans, the lack of forbearance shown by some lenders when borrowers get into financial difficulty and finally the debt collection practices". |
| Our editors' picks for the day's top news and commentary delivered to your inbox each morning. | |