Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Finance: High-interest Loans

House of Lords written question – answered on 27th June 2012.

Alert me about debates like this

Photo of Lord Janner of Braunstone Lord Janner of Braunstone Labour

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.

Photo of Baroness Wilcox Baroness Wilcox The Parliamentary Under-Secretary of State for Business, Innovation and Skills

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.

Does this answer the above question?

Yes1 person thinks so

No1 person thinks not

Would you like to ask a question like this yourself? Use our Freedom of Information site.