Payday loan lenders face clampdown

Payday lenders will be facing stricter rules from the Financial Conduct Authority (FCA) in a drive to prevent lenders from "preying" on borrowers and compelling them into serious debt problems. In particular, the City regulator will be looking into the continuous payment authority (CPA), wherein lenders can automatically debit various amounts, multiple times from a borrower's bank account as payment for an existing loan.  A cap on the number of times this can be done may be set in place.  Another practice that will be checked is the number of times a loan can be rolled over.  This roll over scheme is one of the most profitable areas of a lending business and is also the reason why many borrowers get into spiraling debt they cannot get out of.  From now on, a borrower may only be able to roll over a loan up to two times.  Misleading marketing and advertising campaigns will also be curtailed by stiffer fines and possible closure of firms that try to abuse these.  A total ban on advertising by payday firms has even been recommended in the past. The FCA will take over the regulation of consumer credit from the Office of Fair Trading starting April, 2014.  The FCA will have more encompassing power to put erring companies in line since it regulates most of the United Kingdom's finance companies.  It has the authority to prevent firms from offering high-cost credit to those who cannot afford it.  Proposals for additional affordability checks and lending ceilings have also been put on the table, as well as providing support and proper debt advice to rollover borrowers. A major milestone would be the FCA's release of its rule book, that may just fall short of putting a price cap on the total cost of credit.  If short-term lenders can break even with loans that have much lower costs of fees by extending their terms of payback, then payback lends can as well. At Choice Loans we only work with properly regulated Payday loan lenders. Our one form allows you apply to over 40 different companies. Apply here PayDay Advance Loans.