The following letter was published in the Times today (4 December):
Sir, Yesterday was the closing date for the Financial Conduct Authority’s (FCA) consultation on tightening up consumer credit regulation. We write to urge the FCA to take robust action to prevent payday companies lending irresponsibly to people on low incomes. Payday and other high-cost lenders are creating a tidal wave of misery by lending money to people who cannot afford the repayments, trapping them in a cycle of debt and poverty. At a time when many people are really feeling the pinch, irresponsible lending risks pushing them over the edge, and causing serious and long-term damage to their finances, families and health.
Irresponsible lending practices also risk further undermining the roll-out of exacerbating hardship under Universal Credit — a central plank of the Government’s welfare reform programme — if payday and other irresponsible lenders exploit the move from fortnightly to monthly payment
Repeated calls for greater self-regulation by the high-cost lending industry have fallen on deaf ears.
The high-cost lending industry has proved to be incapable of effective self-regulation – it is now time for Government and regulators to step in and offer consumers the real protection against irresponsible lending practices that they deserve.
We urge the FCA to introduce — and properly enforce — regulations to: Stop payday lenders giving loans to people who can’t realistically afford to pay them back. Stop them rolling over loans and creating spiralling debt. Stop hidden or excessive charges. Stop them raiding borrowers’ bank accounts without their knowledge and leaving them in hardship. Stop irresponsible advertising and instead provide clear and transparent information. And require lenders to promote free and independent debt advice, and ensure they co-operate with other services to help people get out of debt.
Niall Cooper, Church Action on Poverty;
Right Rev John Packer, Bishop of Ripon and Leeds;
Right Rev Steven Croft, Bishop of Sheffield;
Helen O’Brien, Caritas Social Action Network;
Matt Barlow, Christians Against Poverty;
Rev Dr Michael Jagessar, Moderator of the United Reformed Church General Assembly;
Rev Stephen Keyworth, Baptist Union of Great Britain