Uswitch comments on new payday lending regulations

According to new FCA payday loan rules effective from 2nd January 2015, no borrower will ever pay back more than twice what they borrowed, and someone taking out a loan for 30 days and repaying on time will not pay more than £24 in fees and charges per £100 borrowed. Commenting on the new regulations, David Mann, Head of Money at Uswitch.com, says: “Payday lenders have been holding vulnerable consumers to ransom with excessive rates and fees for far too long. While the rest of the personal finance industry has made every effort to lend responsibly, the failures of payday lenders have stuck out like a sore thumb.

“It’s high time these regulations were brought in, to break the cycle of extortionate lending and force unscrupulous lenders to radically change the way they do things or stop lending altogether. These rogue traders will only respond to tough action, and this is the toughest we have seen yet.

“According to the new rules, consumers will never have to pay back more than twice what they’ve borrowed. Yet, the reality is payday loans are still one of the most expensive ways to borrow and it’s often people who can least afford them who end up having to turn to them. We now need high street banks to step up and offer robust short term lending solutions.”