StepChange: Regulation has “not fixed” the payday loan market

11 Nov 2016

Nearly two years on from tough regulations implemented by the Financial Conduct Authority, the payday loan market continues to show signs of irresponsible lending and poor treatment of people in financial difficulty, according to a new report from StepChange Debt Charity.

The proportion of people coming to the charity with payday loan debts has fallen from its peak of 23% in 2013 to 16% this year, but the report identifies persistent and new issues that show regulation and political pressure have by no means fixed the market.

The report also questions whether regulation is falling behind changes in the market, with lenders shifting from the traditional 30-day payday loan to more costly, longer term instalment loans.

The charity is calling on the FCA to finish the job of tackling these problems during the upcoming review of payday loans, and is calling on the Government to help by looking at new forms of affordable credit for those that need it the most.

See the full report here.