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Payday loans industry is ‘still determined to play down problems’

1 July 2013

Citizens Advice is warning payday lenders that they must face up to problems in the industry or expect continuing scrutiny and tough new rules.

Speaking after today’s summit to look at problems with the industry, Citizens Advice Chief Executive Gillian Guy said:

“It is good that extra attention has been given to the problems in the payday loans industry today but I was disappointed that payday lenders are still determined to play down problems. It’s impossible to deny that people have been seriously affected by the irresponsible practices of this industry.

“The fact that people are coming to Citizens Advice for help because they have been given loans they can’t afford to repay and are hounded by texts and phone calls as lenders try to claw back debts shows this is a problem which urgently needs to be tackled.

“Lord Freud was right to raise concerns about the impact that the use of Continuous Payment Authorities could have on Universal Credit. We are already seeing people plunged into serious financial trouble because their bank balance is drained without any warning and it will only get worse as people adapt to a new benefit system.

“The Financial Conduct Authority will have strong, new powers to tackle wrongdoing by payday lenders, and I am particularly keen to see new action on advertising. Payday lenders need to be clear about who they are targeting. We see daytime television adverts with glamorous celebrity endorsements targeted at the unemployed and those on low incomes.”

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.