If Labour MP Paul Blomfield gets his way, payday lenders will no longer be able to target vulnerable people with extortionate interest rates.
He's introduced a private members' Bill to Parliament which got its first reading on Wednesday. His reasoning is simple: "In hard times, it's no wonder that people who are struggling will turn to payday lenders for help. But the massive interest rates, rip-off charges and misleading advertising are often just pushing people further into debt," the Sheffield MP said.
His Bill calls for better control of the advertising and marketing of high-cost credit. It calls for lending limits and a cap on excessive charges. It also requires lenders to refer struggling people to free, independent debt advice, freeze charges and ensure proper repayment plans are put in place.
It comes ahead of next Thursday's announcement from the Office of Fair Trading about whether it is going to refer the industry to the Competition Commission having warned the country's 50 largest lenders to improve the way they conduct their business.
Citizens Advice chief Gillian Guy said: "This Bill is a step towards protecting people from predatory practices and overcoming the problems payday lenders failed to address by breaking promises to customers."
Delroy Corinaldi of the StepChange Debt Charity, said: "There is a pressing need for reform and this Bill offers politicians, regulators and the payday lending sector the chance to come together to help curb the worst excesses of the industry."
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