Citizens Advice backs the ‘Charter to Stop the Payday Loan Rip-Off’ which is being launched in Parliament today and is supported by a group of cross-party MPs, consumer organisations and charities.
Citizens Advice Chief Executive Gillian Guy said:
“We’ve long been calling for action to stop people being given payday loans without proper checks to assess if they can afford to repay. People have seen debts balloon after their loans are rolled over time and time again so it is important this is tackled.
“The FCA’s proposed new rules are a step forward in getting to grips with the payday loan industry and this charter further emphasises the need for tough action. I encourage consumers to sign up to the e-petition in order to send a strong message to the FCA that protecting payday loan customers from predatory behaviour is paramount.”
Citizens Advice has seen a ten-fold increase in payday loans in the last four years.
In August Citizens Advice released an in depth analysis of 665 payday loan cases, reported to its consumer service between 1 January and 30 June 2013, which found that at least 76% could have grounds for an official complaint to the Financial Ombudsman including:
1 in 5 were possible cases of fraud – where a person was chased for a loan they hadn’t taken out.
More than a third involved issues with continuous payment authorities including money that was not authorised to be taken.
12% involved harassment whereby lenders pester people with phone calls and text messages rather than accept affordable repayment offers.
1 in 10 were about lenders’ unfair treatment of people in financial difficulties.