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Citizens Advice responds to Financial Conduct Authority review of high cost credit

31 July 2017

The Financial Conduct Authority (FCA) has today published its review into high-cost credit, including measuring the effectiveness of the payday loan cap, which Citizens Advice has responded to.  

Citizens Advice Chief Executive Gillian Guy said:

“The payday loan cap has protected thousands of borrowers from dangerous amounts of debt.

“Prior to the cap extortionate fees and charges were trapping people into debt - meaning what was supposed to be a short-term loan turned into a long-term nightmare. Since the cap and other new measures were brought in the number of people seeking our help with payday loan debt has more than halved.

“But people are experiencing similar problems when taking out other forms of high cost credit - like doorstep loans, guarantor loans and rent to own services - as well as overdrafts.  It’s good to see the FCA recognise this and the need for action, we think applying a similar cap would help protect consumers - so strongly recommend the FCA considers this as part of its options for other forms of high cost credit.

“A decade on from the financial crisis, it is important to keep in mind the lesson learnt by credit providers and regulators of how ‘loose lending’ overburdens households with unmanageable debt.  The review of credit-worthiness is a good opportunity to assess whether the tests lenders use to check if people can afford to take out credit are still up to the job - and are being used appropriately.  

“All too often people are being able to borrow money which they can’t afford to pay back. The FCA has rightly recognised that firms should fully consider people’s income and outgoings when deciding whether to lend to them. We’d like also the FCA to turn its guidance on affordability checks into rules that lenders must abide by.”


Notes to editors

  1. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  2. The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  3. To get advice online or find your local Citizens Advice in England and Wales, visit
  4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
  5. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
  6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.