High cost credit charter to be launched as debt crisis deepens

[Nibbler]

Link -> http://www.theguardian.com/society/2...orstep-lending

Consumer groups and politicians are joining forces to launch a charter to combat the rising tide of high-cost credit and the spiralling debt crisis

A major alliance of consumer and anti-poverty charities – including Which?, the Centre for Responsible Credit, StepChange, the debt advice charity, and Church Action on Poverty (CAP), backed by a cross-party group of MPs led by Labour's Paul Blomfield – will launch a charter next week calling on the government to tackle the "bad products and bad practices" of the high-cost credit market and avert the growing crisis of "broke Britain".

[Amethyst]

Re: High cost credit charter to be launched as debt crisis deepens



Love this

On Thursday, the Financial Conduct Authority (FCA), that in April 2014 takes over the regulation of the 50,000 firms with consumer credit licences, unveiled a two-month consultation on a series of rules to regulate the sector. They include limiting payday loan rollovers that can lead to interest rates in excess of 5,000%; affordability checks on borrowers; and restricting to twice the use of continuous payment authorities (CPAs). Known as "siphoning", these allow a lender to take money from a borrower's account, charging for as many as 90 "dips", whether successful or not, at £5 a time, leaving an individual with nothing on which to live. Martin Wheatley, chief executive of the FCA, promises, "Tougher regulation is coming… the clock is ticking." Errol Damelin, chief executive of Wonga, says: "We want better regulation… we want to keep the bad guys out."

Supporters of the charter say the FCA's proposals don't go far enough fast enough, nor are they tough enough. "We are pleased that the FCA is planning action to clean up credit," says Richard Lloyd, Which? executive director. "However, the regulator needs to go further. We want it to clamp down on irresponsible lending across the credit market, including capping sky-high penalty charges, freezing charges for people in financial difficulty and ending unsolicited credit increases."

I assume as well as jumping about making a palava they are all responding strongly to the consultation.

[Nibbler]

Re: High cost credit charter to be launched as debt crisis deepens

When a copied and pasted the quote, the Picture was actually pasted with it. Was sooooo tempted to leave it in.

[charitynjw]

Re: High cost credit charter to be launched as debt crisis deepens

A bunch of reprobates on a beach in Brighton?

Oh, my apologies, that's next month, isn't it!

[labman]

Re: High cost credit charter to be launched as debt crisis deepens

All good news, BUT people should know about one bit of the article which could cost consumers hundreds of pounds:

They include limiting payday loan rollovers that can lead to interest rates in excess of 5,000%; affordability checks on borrowers; and restricting to twice the use of continuous payment authorities (CPAs). Known as "siphoning", these allow a lender to take money from a borrower's account, charging for as many as 90 "dips", whether successful or not, at £5 a time, leaving an individual with nothing on which to live.


If anyone has set up a Continuous Payment Authority (CPA) which is standard practice with Payday Lenders / Logboogbook Lenders etc... people should be aware you can ask your bank or building society to cancel these with immediate effect. This could stop the company being able to take any money out at all. Follow the verbal request with the same in writing and ask for confirmation the CPA has been cancelled.

Some banks (Barclays in particular) will tell you they cannot do it at all, or they have to wait until the first payment has been asked for. This is not true. They can and should be cancelled immediately to put you back in control of your money.

It's a shame that one bit spoils an otherwise good article. The FCA is looking promising. I hope it doesn't become too unwieldy.

[charitynjw]

Re: High cost credit charter to be launched as debt crisis deepens

What is the solution to all of this?

Will desperate people be forced back to the illegal back-street loan sharks?