A quarter of payday lenders to shut down

Tim Wallace
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AT LEAST a quarter of payday lenders will not be able to cope with new rules on how they treat customers, the Financial Conduct Authority has forecast.

The City watchdog took over regulating the consumer credit industry yesterday.

It wants to stop lenders rolling over debts more than twice and stop them accessing customers’ bank accounts more than twice.

The regulator will also require lenders to let customers know how to access debt advice.

Industry body the Consumer Finance Association expects as many as 40 or 50 per cent of firms may leave the business when rules come in next year capping the interest rates they can charge.

But it welcomed plans to drive out the more disreputable lenders.

“The new regulation will level the playing field for our members and the FCA now needs to focus its efforts on the worst practice not just the best-known lenders,” said its chief, Russell Hamblin-Boon.

“We look forward to these rules driving up standards and driving out rogue lenders.”