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To ask Her Majesty's Government what measures they will take, if any, to increase protection for consumers with regard to super-high-interest loans, such as those provided by Wonga.
The Government are committed both to curbing unsustainable lending and to strengthening consumer protections, particularly for the most vulnerable in society. Our vision is to empower consumers to make better choices for themselves so that they are free to borrow if that is what they decide is in their best interest, as well as to have in place a safe and fair regulatory framework for credit.
That is why we have been working with the four main trade associations to strengthen the payday lending industry codes of practice to deliver real enhanced consumer protections and to provide greater transparency about how these loans work. We also anticipate that the outcome of the OFT's compliance review currently in progress will require the industry to deliver further measures to address consumer detriment in this market. In addition, the Government are considering giving the OFT new powers to suspend credit licences with immediate effect and will provide an update on this shortly.
To inform future policy decisions, the Government have commissioned research to gather robust evidence on the impact of introducing a cap on the total cost of credit that can be charged across a range of high cost credit products in the market. A report on this is expected this summer.