Last week news broke that the Financial Conduct Authority (FCA) were going to be getting stricter on watching how payday loan companies operate. The rather off handed ways in which these companies work should be seen as a concern to the public. This rings true with the statistic that 1 in 5 people surveyed by the government said they weren’t even asked about their finances when applying for a payday loan. Here at the Cash Advances Blog we want to tell you all about these proposed changes and what that means for you the consumer.
One such provision to go in place would be the correct advertising of what is at stake when you consider using such a service. The FCA would want to see an end to ‘misleading’ services being shown to potential clients. This would mean that the flashy and quick cut ads we see on TV would have to be advertised in the same fashion that banks and building societies do credit card and mortgage ads. Even a short acknowledgment of the high interest you can pay on these loans would be seen as a good place to start.
We don’t want to be completely negative towards these companies though. We have mentioned before on the blog that a payday loan can have a time and a place for someone. If people did want to use one, it’s still a better option than getting help from a private loan shark. It’s the level of protection, of lack of should we say, that really worries us. Probably the most important proposal to look at is the proof line. If this goes ahead it means that when someone is applying for a payday loan they will have to show evidence that they will be able to easily repay it within time. Ideas like this will stop people from gambling with their own finances and could help a lot of families in trouble.
If there’s one thing to take away from this news, we should all realise that payday lenders need to be regulated most more stringently. There is still a flagrant attitude attached with this kind of business and it won’t change soon unless better regulations are put in place.