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Citizens Advice backs payday loan charter

15 Hydref 2013

Citizens Advice backs the ‘Charter to Stop the Payday Loan Rip-Off’ which is being launched in Parliament today and is supported by a group of cross-party MPs, consumer organisations and charities.

Citizens Advice Chief Executive Gillian Guy said:

“We’ve long been calling for action to stop people being given payday loans without proper checks to assess if they can afford to repay.  People have seen debts balloon after their loans are rolled over time and time again so it is important this is tackled.

“The FCA’s proposed new rules are a step forward in getting to grips with the payday loan industry and this charter further emphasises the need for tough action. I encourage consumers to sign up to the e-petition in order to send a strong message to the FCA that protecting payday loan customers from predatory behaviour is paramount.”

Citizens Advice has seen a ten-fold increase in payday loans in the last four years.

In August Citizens Advice released an in depth analysis of 665 payday loan cases, reported to its consumer service between 1 January and 30 June 2013, which found that at least 76% could have grounds for an official complaint to the Financial Ombudsman including:

  • 1 in 5 were possible cases of fraud – where a person was chased for a loan they hadn’t taken out.
  • More than a third involved issues with continuous payment authorities including money that was not authorised to be taken.
  • 12% involved harassment whereby lenders pester people with phone calls and text messages rather than accept affordable repayment offers.
  • 1 in 10 were about lenders’ unfair treatment of people in financial difficulties.

Notes to editors:

  1. The Citizens Advice service comprises a network of local bureaux, 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 find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
  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. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
  6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.