Payday lenders have moved to head off the threat of tougher regulation unveiling a customer charter to increase transparency and help set the “highest” customer standards – but may not appear on websites and in stores until November.
However consumer groups yesterday said the charter was largely rules that had already been flouted and said stricter action should follow if big improvements are not seen in the next six months.
Under the charter, lenders have agreed to give clear information about how payday loans work and example prices for each £100 borrowed, including fees and charges.
They also promised that customers will not be pressured into taking out a loan or rolling one over. They will freeze interest and charges if a customer is in financial difficulty and making payments under a repayment plan, or after a maximum of 60 days of non-payment.