FCA confirms tough new rules for £200bn consumer credit market

The new rules will result in changes for how payday lenders and debt management companies treat their customers including mandatory affordability checks for payday borrowers and giving the FCA the power to ban any misleading adverts from payday lenders.

The biggest changes come for payday lenders and debt management companies, including limiting the number of loan roll-overs to two, restricting (to two) the number of times a firm can seek repayment using a continuous payment authority, a requirement to provide information to customers on how to get free debt advice and requiring debt management firms to pass on more money to creditors from day one of a debt management plan, and to protect client money.

Martin Wheatley, the FCA’s chief executive, said:

“Millions of consumers access some form of credit each day, from paying for everyday goods by credit to taking out a payday loan.  We want to be sure that the market works well when people need it – whether that’s for one day, one month or longer.

“Our new rules will help us to protect consumers and give us strong new powers to tackle any firm found to be overstepping the line.