Tougher Payday Lender Rules

Tougher Payday Lender Rules.

It’s predicted that a quarter of payday loan lenders will pull out of the market as they face tougher rules. The Financial Conduct Authority (FCA) will take over regulation of the consumer credit sector on the 1^st of April.

As part of its first action, the FCA will issue a full review of how payday lenders treat its borrowers who are struggling to pay back the loans. There are already several more rules being planned for tougher regulation of the credit lenders.

Last year it was found that some payday lenders were using tough measures to get back the money owed. In the investigation it was also found that lenders had lent to those who would not qualify, such as minors and even a case of a person with mental health issues being granted for a loan.

Up to 200 payday lenders account for less than 1.5% of the £200bn consumer credit market and are often used by people in financial difficulty.