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Tackling risks in high-cost short-term credit (including payday lenders) We will tackle harm to consumers who are most at risk – those who are already struggling to pay their loans – while developing new measures that will seek to prevent unaffordable and irresponsible lending to consumers for the future.
We will:
• consider the role for the regulator in facilitating real- time data sharing, if the currently evolving market-led solutions to this prove to be ineffective
• consult on the introduction of price caps on what payday lenders can charge
• take over ongoing investigations from the Office of Fair Trading and respond to new cases, applying appropriate sanctions where we find firms are non- compliant
• begin thematic work on arrears management processes and how customers in financial difficulties are treated
• identify and address poor financial promotions
• visit firms, including the top five high-cost short- term credit lenders to check that they are adhering to our new policy rules, in particular the restrictions on rollovers and continuous payment authorities
and the obligation to conduct an affordability assessment that will address incentives for firms to make money by making unaffordable loans
• take a detailed look at firms’ business plans, how they operate and their track record through our authorisations process, drawing on all the available evidence
Addressing issues with credit cards and overdrafts We will carry out a market study in 2014/15 assessing whether competition is effective (see Chapter 4) in the credit card market and whether consumers have access to credit cards that are affordable and deliver good value for money.
We will address issues concerning overdrafts, including considering making new policy rules that build on the Government’s agreed measures with industry (e.g. opt-outs and text alerts). We will proactively supervise banks and building societies’ overdrafts at a firm-by- firm level and we will provide evidence to and work with the newly formed Competition and Markets Authority (CMA).
Improving financial promotions We will review financial promotions across the consumer credit market to ensure that they are not misleading, unclear or unfair.
Improving debt management We want to improve the quality of debt management services where needed, while ensuring access to markets for firms and increasing consumers’ awareness. To do this we will act to identify and deal with poor behaviour. In 2014 we will meet with debt management firms to make our expectations clear to them early on. We will also begin thematic work assessing the quality of advice provided across the sector.
Enhancing standards for logbook loans The logbook loans sector is small, but we have evidence of some very poor consumer outcomes in it. In 2014/15 we will apply a demanding authorisations approach to ensure only responsible firms remain in the market. This will be supported by appropriate event-driven supervision and enforcement to maintain standards.
We will:
• consider the role for the regulator in facilitating real- time data sharing, if the currently evolving market-led solutions to this prove to be ineffective
• consult on the introduction of price caps on what payday lenders can charge
• take over ongoing investigations from the Office of Fair Trading and respond to new cases, applying appropriate sanctions where we find firms are non- compliant
• begin thematic work on arrears management processes and how customers in financial difficulties are treated
• identify and address poor financial promotions
• visit firms, including the top five high-cost short- term credit lenders to check that they are adhering to our new policy rules, in particular the restrictions on rollovers and continuous payment authorities
and the obligation to conduct an affordability assessment that will address incentives for firms to make money by making unaffordable loans
• take a detailed look at firms’ business plans, how they operate and their track record through our authorisations process, drawing on all the available evidence
Addressing issues with credit cards and overdrafts We will carry out a market study in 2014/15 assessing whether competition is effective (see Chapter 4) in the credit card market and whether consumers have access to credit cards that are affordable and deliver good value for money.
We will address issues concerning overdrafts, including considering making new policy rules that build on the Government’s agreed measures with industry (e.g. opt-outs and text alerts). We will proactively supervise banks and building societies’ overdrafts at a firm-by- firm level and we will provide evidence to and work with the newly formed Competition and Markets Authority (CMA).
Improving financial promotions We will review financial promotions across the consumer credit market to ensure that they are not misleading, unclear or unfair.
Improving debt management We want to improve the quality of debt management services where needed, while ensuring access to markets for firms and increasing consumers’ awareness. To do this we will act to identify and deal with poor behaviour. In 2014 we will meet with debt management firms to make our expectations clear to them early on. We will also begin thematic work assessing the quality of advice provided across the sector.
Enhancing standards for logbook loans The logbook loans sector is small, but we have evidence of some very poor consumer outcomes in it. In 2014/15 we will apply a demanding authorisations approach to ensure only responsible firms remain in the market. This will be supported by appropriate event-driven supervision and enforcement to maintain standards.
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