Bolton welcomes curbs on payday loans
PLANS for a new clampdown on payday lenders has received backing in Bolton.
The new watchdog — the Financial Conduct Authority — will be banning misleading adverts for costly loans and placing risk warnings on adverts.
Payday lenders will also not be allowed to roll over loans more than twice and will be restricted on the number of times they can try to take money from people’s bank accounts.
The news has been welcomed in Bolton — with the Bolton Credit Union saying it “broadly supports the announcement”.
Manager David Batten said: “A lot of the advertising has led to these issues, making people think that all they need to do is smile and they will get a loan.
"The problem is that these firms are there to make a profit and unlike the credit union, they do not make ethical lending decisions — we want to give people a sensible period of time to pay money back.”
In June, Bolton Wanderers pulled out of a £500,000 shirt sponsorship agree-ment with pay day loan firm QuickQuid following outcry across Bolton.
Bolton Council has cautiously welcomed the announcement from the FCA.
Cllr Nick Peel said: “The Government has finally woken up to the fact that there is a crazy situation at present whereby pay day loan companies can access payments from people’s bank accounts as soon as the account is in credit, thus preventing people from paying other essential bills such as utilities and food.
“However it’s only a sticking plaster on a huge problem. We need the Government to regulate these companies so that they act in a responsible manner with rates of interest capped, as is the case in other countries.”
Chief executive of the FCA, Martin Wheatley, said: “This type of credit must only be offered to those that can afford it, and payday lenders must not be allowed to drain money from a borrower’s account.
“That is why we’re imposing tighter afford-ability checks, and limiting the use of rollovers and continuous payment authorities.”
For more details on the Hoot credit union in Bolton, visit wisemoney.org.uk
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