As a cap on payday loans is announced, what are your experiences with lending firms?
- Credit: copyright: Archant 2013
George Osborne has announced a cap on the costs of controversial 'payday loans'.
The Chancellor said the limit, which will cover fees on the lending as well as interest, would help prevent vulnerable consumers being exploited.
The Government will bring in powers to impose the restriction through an amendment to the Banking Reform Bill, but the level of the cap will be set by the new Financial Conduct Authority (FCA).
The move comes after Opposition leader Ed Miliband complained earlier this month that payday loans firms such as Wonga were 'running riot through our communities'.
Mr Osborne told ITV's Daybreak: 'We are going to introduce a cap on the cost of these loans and I mean a cap on all the different elements brought together because it is not just the interest charge, it's also the arrangement fees and the like, to protect people who take out these loans to make sure they are not being exploited, to make sure hard-working people get a fair deal from the financial system, whether it's the banks or the payday lenders or internet lenders.
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'The best thing is to empower this body we have created, the consumer regulator, the consumer authority is going to look at all of this because I think one of the traps here is to think you can just control one part of this industry and then you'll find it's a bit like squeezing a balloon - the costs will appear somewhere else.'
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