Watchdog accused of wimping out on new loan rules

Consumer groups want the City regulator to bare its teeth and tackle payday lenders, writes Simon Read

MPs and consumer groups have criticised the City watchdog for being toothless ahead of it taking over responsibility for payday lenders from Tuesday.

The Government was also criticised for not ensuring the introduction of urgent changes to protect vulnerable people from unscrupulous high-cost credit companies.

The Business, Innovation and Skills (BIS) Select Committee called for a series of tough new measures. But MPs said the responses from the Government and the Financial Conduct Authority show they are not going far enough.

The FCA refused calls to limit the number of times a loan is rolled over, saying: "There is a need for some flexibility for consumers to roll over their loans." It also ignored calls for payday loans to be banned from advertising on children's television, blaming European Human Rights laws.

Paul Blomfield, Labour MP for Sheffield Central, who sits on the BIS Committee, said: "I'm disappointed that the Government is not backing our recommendation for a tougher approach to advertising."

He added: "I'm concerned that the Government has not adopted a real-time database of lending, which could be vital in stopping multiple lending that pushes people into spiralling debt."

The FCA said there were obstacles to real-time data-sharing that it is discussing with the industry. "We will conclude these discussions in the summer," it said.

Peter Tutton head of policy at debt charity StepChange, said: "The introduction of a real-time data-sharing regime should be an essential part of the FCA's strategy."

Stella Creasy, Labour's Shadow Minister for Competition and Consumer Affairs, criticised the Government for not introducing a cap on the cost of credit quickly enough. It plans to introduce one next January. "The cap should be brought forward to 2014," she demanded.

Richard Lloyd, executive director of Which?, also called for faster action. "With millions increasingly reliant on payday loans and other high-cost credit, the FCA should act swiftly to ban excessive fees and charges," he said.

Gillian Guy, chief executive of Citizens Advice, criticised the FCA for not considering proposals to force lenders to give notice before using a continuing payment authority. "The misuse of these is one of the most damaging factors in payday lending," she said.

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Operations Manager

    £30000 - £38000 per annum: Recruitment Genius: They are a financial services c...

    Guru Careers: Stockbroker

    £Basic (OTE) + Uncapped Commission: Guru Careers: A Stockbroker (qualified / p...

    Recruitment Genius: Financial Adviser

    £20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

    SThree: Graduate Recruitment Resourcer

    £20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

    Day In a Page

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    How a costume drama became a Sunday night staple
    Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

    Miliband promises no stamp duty for first-time buyers

    Labour leader pushes Tories on housing
    Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

    Aviation history is littered with grand failures

    But what went wrong with the SuperJumbo?
    Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

    Fortress Europe?

    Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
    Never mind what you're wearing, it's what you're reclining on

    Never mind what you're wearing

    It's what you're reclining on that matters
    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence