Despite all the negative media commentary, responsible payday lenders work hard to provide customers with an excellent service, resulting in extraordinarily high satisfaction ratings. The industry isn’t perfect and does have a poor reputation. But the four main associations representing payday and short-term lenders have launched a new customer charter, setting out a series of enhanced protections for customers. It’s a clear commitment to responsible lending, which will raise standards and improve customer service. The measures include improved affordability checks, clearer communication that everyone understands, and help for anyone in financial difficulty when they have a payday loan. Consumers value the speed and flexibility of payday loans. Now they can be confident that they are well-protected too.
Richard Griffiths is head of communications at the Consumer Finance Association.
With total annual payday lending estimated at £1.13bn, there’s certainly demand for this type of credit. But we are also seeing a negative impact, with the number of people contacting our charity for help with payday loans rising four-fold since 2009. Although we do not believe it’s right to remove credit options from people, we do have some genuine concerns about the payday loan industry. Not only can this be incredibly expensive credit, there have been a lot of complaints about responsible lending and the treatment of people in financial difficulty. We welcome the fact that the industry is seeking to address these issues. But we will also be watching closely to see that the measures make a difference to business practices on the ground. Anything less than this will represent a missed opportunity, which we will speak up against.
Delroy Corinaldi is external affairs director at the Consumer Credit Counselling Service.