New FCA regs see payday loan complaints down 45 per cent - Citizens Advice

The Citizens Advice Bureau has announced that it has seen the number of complaints about payday loan compnaies nearly halved over the last year.

The charity said new rules introduced by the regulator, the Financial Conduct Authority (FCA), had led t the dramatic drop.

The FCA, and introduced a cap on payday loan charges in January 2015.

Between January and March 2014, before the FCA brought in tightened regulations ast April, Citizens Advice received 10,155 complaints about lenders.

But in the same period a year later, it saw that number fall by 45 per cent to 5,554.

Citizens Advice chief executive, Gillian Guy said: “The drop in the number of problems reported to us about payday loans is good news for consumers.”

She added: “It demonstrates the impact a strong stance against irresponsible lending can have on people’s lives.”

The FCA’s new rules include a limit on the number of times a loan could be “rolled over”, or continued from month to month; stricter lending criteria; and limits on advertising.

And since January this year there have also been caps on repayments.

No one has to pay more than 0.8 per cent a day of the amount borrowed, and no one has to pay back any more than twice what they borrowed.

Since April 2014, the size of the payday loan market has shrunk considerably.

While there were up to 400 high-cost short-term lenders registered back then, just 247 applied to the FCA for authorisation in February.

Two months ago Wonga - the largest payday lender - said its number of customers had fallen from over a million to 575,000.

It also reported a 36 per cent fall in the number of loans it was making.