Tavish calls for more action on payday loans to protect consumers
Tavish Scott MSP has backed calls from a national debt advice charity for the Financial Conduct Authority to look at tightening the regulations around the payday loan market.
The call made today after a report published by StepChange Debt Charity, the UK’s largest debt advice charity, found that regulations had “not fixed” the payday lending market, with some payday loan providers still not engaging in best practise.
Last year, 15.4% of those who contacted StepChange Debt Charity from Shetland had a payday loan debt, with an average balance of £178.00. Although the charity has reported fewer people seeking help with payday debt, those who are do not always get a fair deal.
Commenting, Tavish Scott MSP said:
“Payday loans can often seem like the only option, but we need to see better regulation to stop families and individuals falling into a cycle of financial difficulties. I support the calls for a review of the payday lending cap but in the meantime would encourage people in Shetland who need advice to contact StepChange.”
Stepchange Debt Charity Scotland’s Public Affairs Officer James Stewart said:
“Regulation can make a significant difference to broken markets and FCA action over the last few years has gone some way to fixing the worst excesses of payday lending, but there is clearly still work to be done.
“It is essential that the FCA review of the payday lending cap is broad enough to fix areas of consumer detriment and poor lending practices. There is also a clear and immediate need for the Government to examine more affordable forms of borrowing for financially vulnerable people, who are often left with nowhere else to turn in their hour of need.
“Debt really can happen to anyone. If you are borrowing to cover your household bills, or stuck in a cycle of minimum payments, the time to act is now.”.