Treasury written question – answered on 22nd May 2019.

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Photo of Lord Taylor of Warwick Lord Taylor of Warwick Non-affiliated

To ask Her Majesty's Government what assessment they have made of any increase in complaints regarding short-term and payday lenders related to those suffering with problem debt.

Photo of Lord Young of Cookham Lord Young of Cookham Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Cabinet Office)

The Government has fundamentally reformed regulation of the consumer credit market, transferring regulatory responsibility to the Financial Conduct Authority (FCA) on 1 April 2014.

The FCA requires payday lenders to carry out robust affordability checks, limits the number of times a payday loan can be rolled over to two, places tough restrictions on lenders’ use of continuous payment authorities, and requires all payday lending adverts to include a risk warning and information about where to get free debt advice.

The Government has given the FCA strong powers to protect consumers and to take action against firms and individuals that do not meet its standards. In 2018, the FCA issued total fines of £60 million.

On problem debt more broadly, the Government is implementing its manifesto commitment to introduce a breathing space and statutory debt repayment plan. The two polices aim to give people in problem debt the opportunity to take control of their finances and put them on a sustainable footing.

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