NEW PRODUCT RULES REQUIRED TO LIMIT THE DAMAGE CAUSED BY UNAFFORDABLE PAYDAY LOANS
- Session: 2013-14
- Date tabled: 19.06.2013
- Primary sponsor:
- Sponsors:
That this House recognises the 12-week deadline for payday lenders submitting evidence to the Office of Fair Trading (OFT) addressing failings outlined in the compliance review of the sector has now passed; is concerned by the OFT’s finding that there is currently widespread irresponsible lending and lenders are failing to comply with the standards expected of them; notes the growing number of complaints to debt advice agencies and the Financial Ombudsman about problems with payday lenders; further notes that 36,413 people contacted StepChange Debt Charity for help with payday loan debt problems in 2012, twice as many as did in 2011; further notes that in the same period the average payday loan balance of a StepChange Debt Charity client rose from £1,267 to £1,657 and that this latter figure is in excess of the average income of StepChange’s clients which is £1,320; further notes that, in 2012, 7,221 people who contacted the Debt Charity had five or more payday loans and this figure has increased by a factor of 10 since 2009; calls on the OFT to take action now to make sure irresponsible payday lenders are stopped from trading; further calls on the Government to adopt a range of product interventions to limit the damage caused by unaffordable payday loans; supports the initiative of the hon. Member for Sheffield Central, to introduce a Private Member's Bill on the subject; and looks forward to a time where the amount that can be borrowed on high-cost loans is restricted to prevent borrowers becoming trapped by spiralling multiple payday loan debts.