Make sure your MP is supporting the High Cost Credit Bill! It could make a big difference and help protect people from the less savoury elements of the payday loan industry.
Many companies offering payday loans are effectively a law unto themselves and we think it’s time that they were reined in. That’s why we’re calling on people to ask their MP to support the High Cost Credit Bill in Parliament on Friday 12th July.
It’s easy to feel jaded by modern politics, but we believe that this Bill is an opportunity to bring about real change to make a positive difference to the thousands of people we help work through problem payday loan debts.
Here are the four key things the Bill would introduce…
1. Health warnings on adverts
The Bill would shake up the way that payday loans are advertised. A key part of this is to include health warnings on adverts about the dangers involved with taking out a payday loan.
This could involve measures similar to those seen for alcohol and tobacco products in the past.
2. Better checks before lending
Recent research has shown that only six out of the 50 biggest payday loan companies carried out income checks before approving a loan. The High Cost Credit Bill would make companies carry out more thorough checks to ensure their customers are able to afford to repay on time.
[SPOTLIGHT]The Bill would also require lenders to share more information about payday loans. This would help companies to make more responsible lending decisions and protect borrowers from unaffordable loans.
3. More openness about payments
Payday loan repayments are taken out of people’s bank accounts using their debit card, via a form of payment called a continuous payment authority. Unfortunately, these have proven much harder to cancel than a Direct Debit (though we’ve got an article that shows you how to cancel a continuous payment authority).
We’ve seen many examples of companies misusing these payment arrangements and misinforming their clients about how they work. The Bill would address this problem by forcing companies to give three days’ notice before taking payments and making sure customers know how to cancel the arrangement.
4. Access to free payday loan debt help
Many people use payday loans as a way to try and deal with a debt problem, which is usually not a good idea. For people struggling financially, high interest, short-term loans are no substitute for good quality, free debt advice.
If the bill is passed into law, payday lenders would be required to advise their customers of the availability of free debt advice agencies (like us) at specific trigger points – for example, when a customer is turned down for a loan or asks to extend (or rollover) their loan.
Are these changes needed?
We think they are. Many customers are treated well by lenders but an awful lot aren’t. Some payday lenders are worse than others and our clients regularly tell us about the harsh treatment they receive.
Some people think that payday loans should be banned altogether, but that’s not what this Bill is about. We hope the Bill will bring some much needed protection for those that suffer at the sharp end of payday loans.
You can support the Bill too
If would like to see this Bill come into law then you can ask your MP to make it happen. Visit our website for more details on how you can email your MP and ask them to support the High Cost Credit Bill.