Self regulation: what does it really mean for consumers?

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Self regulation what does it really mean for
consumers?

• Hannah Hollingworth
• Campaigns Officer, Citizens Advice

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The problem
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And
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Examples
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The Rules

• Payday lenders must
• hold a credit licence
• follow Office of Fair Trading Guidance

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Self regulation
Good practice customer charter Payday and
short-term loans
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Holding payday lenders to account
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How it works

• Answer survey
• Answer No to any questions Answer Yes to all
  questions
• Complain? Thank you
• Yes No
• Making a complaint Thank you
• FOS

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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

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Less positive results

• 38 were asked questions about their finances and
  whether they could afford the loan
• 76 had problems repaying their loan

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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

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• Almost sure I'll have to take another out next
  month to be able to afford food and heating. 
•  

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• 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.

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•  
• Ive 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.

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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

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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

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• How can we make things better for consumers now
  and post July 2014?

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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

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www.citizensadvice.org.uk/paydaylendershannah.ho
llingworth_at_citizensadvice.org.uk