Payday Loan rates to be capped

I am pleased that the Government are at last responding to this issue but the devil really is in the detail and we will have to wait to learn exactly what George Osborne is proposing.

It is not just the high rates of interest that punish borrowers but the unacceptable methods and charges of debt collection – particularly using Continuos Payment Authority (CPAs) to empty peoples bank accounts. The constant advertising and text messaging bombardment urging people to take out these loans targeted at the vulnerable should also be regulated.

Citizens Advice are right to raise the issue of choice in the market and that a cap on credit must be a cap on the total cost of credit. We must also encourage mainstream lenders like the high street banks offer short term loans and continue to encourage the growth of Credit Unions.