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| Payday loan charges cap takes effect | Payday loan charges cap takes effect |
| (about 5 hours later) | |
| A cap on the cost of payday loans enforced by the City regulator has now come into effect. | A cap on the cost of payday loans enforced by the City regulator has now come into effect. |
| Payday loan rates will be capped at 0.8% per day of the amount borrowed, and no-one will have to pay back more than twice the amount they borrowed. | Payday loan rates will be capped at 0.8% per day of the amount borrowed, and no-one will have to pay back more than twice the amount they borrowed. |
| The Financial Conduct Authority (FCA) said those unable to repay should be prevented from taking out such loans. | The Financial Conduct Authority (FCA) said those unable to repay should be prevented from taking out such loans. |
| Consumer group Which? has called for the FCA to turn its attention to the wider market for credit. | Consumer group Which? has called for the FCA to turn its attention to the wider market for credit. |
| Loan sharks | Loan sharks |
| The changes mean that if a borrower defaults, the interest on the debt will build up, but he or she will never have to pay back more than twice the amount they borrowed. There is also a £15 cap on a one-off default fee. | The changes mean that if a borrower defaults, the interest on the debt will build up, but he or she will never have to pay back more than twice the amount they borrowed. There is also a £15 cap on a one-off default fee. |
| The regulator's research suggests that 70,000 people who were able to secure a payday loan now would be unable to do so under the new, stricter rules. They represent about 7% of current borrowers. | The regulator's research suggests that 70,000 people who were able to secure a payday loan now would be unable to do so under the new, stricter rules. They represent about 7% of current borrowers. |
| But Christopher Woolard, of the FCA, argued that only a very small number would seek credit from unregulated loan sharks instead. He said that the regulator would be monitoring the situation carefully. | But Christopher Woolard, of the FCA, argued that only a very small number would seek credit from unregulated loan sharks instead. He said that the regulator would be monitoring the situation carefully. |
| He also said that the reforms needed time to bed down before their effect was assessed. There has been some criticism that the initial review is scheduled in two years. | He also said that the reforms needed time to bed down before their effect was assessed. There has been some criticism that the initial review is scheduled in two years. |
| Richard Lloyd, executive director of Which?, said that the changes came "not a moment too soon". | Richard Lloyd, executive director of Which?, said that the changes came "not a moment too soon". |
| "The regulator has clearly shown it's prepared to take tough action to stamp out unscrupulous practices, and they must keep the new price cap under close review," he said. | "The regulator has clearly shown it's prepared to take tough action to stamp out unscrupulous practices, and they must keep the new price cap under close review," he said. |
| "It is now time to turn the spotlight on unfair practices in the wider credit market. We want to see an end to excessive fees that also make it hard to compare different loans, including those charged for unauthorised overdrafts and credit cards." | "It is now time to turn the spotlight on unfair practices in the wider credit market. We want to see an end to excessive fees that also make it hard to compare different loans, including those charged for unauthorised overdrafts and credit cards." |
| Have you used payday loan companies? Do the new regulations provide adequate protection for consumers? You can email haveyoursay@bbc.co.uk with your experiences. Please leave a telephone number if you are willing to be contacted by a BBC journalist. | |
| Have your say |