self regulation: what does it really mean for consumers? hannah hollingworth campaigns officer,...
TRANSCRIPT
Self regulation: what does it really mean for consumers?
Hannah HollingworthCampaigns Officer, Citizens Advice
The problem
And
Examples
The Rules
Payday lenders must:
• hold a credit licence
• follow Office of Fair Trading Guidance
Self regulation
Good practice customer charterPayday and short-term loans
Holding payday lenders to account
How it worksAnswer survey
Answer No to any questions Answer Yes to all questions
Complain? Thank you
Yes No
Making a complaint Thank you & FOS
What we have found so far
3179 responses by the end of August 2013
Some positive results:• 80% were clear about total repayment costs• 85% were clear about how to repay their loan
Less positive results
• 38% were asked questions about their finances and whether they could afford the loan;
• 76% had problems repaying their loan
Of those who had problems repaying
• 18% felt the lender dealt with them sympathetically and positively
• 17% were offered a freeze on interest and charges if they made payments under a reasonable repayment plan
• Only 9% of respondents were told about the availability of free debt advice
‘Almost sure I'll have to take another out next month to be able to afford food and heating.’
‘They left recorded messages on my mobile
Xmas Eve, Xmas Day and Boxing Day to get
me to check my emails and then phoned me at
work demanding payment when I had already
told them I couldn't pay and had gone to a Debt
Management Company, then phoned me 10
minutes later on my mobile demanding
payment.’
‘I’ve asked to cancel the CPA and agreed a
planned repayment schedule yet they raid my
bank account on an almost daily basis which
my bank immediately disputes and refunds.’
What has changed?
• 19 payday lenders have left the market
• The FCA are consulting on a new rule book
• OFT has referred the payday loan industry to the Competition Commission.
• 13 payday lenders, have provided Citizens Advice Bureaux with escalation numbers
The FCA rulebook
The consultation includes rules for:•tighter affordability checks•limits on loan rollovers•limiting the use of Continuous Payment Authorities•borrowers being signposted to free debt advice•controls on advertising
How can we make things better for consumers now
and post July 2014?
What can I do?
• Ask your clients to fill in our survey
• Promote our film about Neil's payday problems
• Take action against irresponsible and misleading advertising
www.citizensadvice.org.uk/paydaylenders