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Payday loan complaints fall by 45%


The number of complaints to payday loan companies have almost halved in the past year, according to data from Citizens Advice Charity.

The charity has claimed that the drop in complaints is thanks to the two new regulations introduced by the Financial Conduct Authority (FCA) in April 2014 and January 2015. The new rules introduced in April included changes such as a limit on the number of times a loan could be “rolled over” from month to month, stricter lending criteria and limits to advertising. In January, the FCA further regulations meaning customers do not have to pay more than 0.8% a day of the amount borrowed, and no one has to pay back any more than twice what they borrowed.

Between January and March 2014, before any of the new regulations were introduced, Citizens Advice received 10,155 complaints about payday lenders. In the same period a year later, once the regulations had been put in place, the number fell to 5,554, which is a drop of 45%.

Since April 2014, the size of the UK payday loan market has also shrunk considerably. The FCA had 400 high cost, short-term lenders registered before the regulations, which dwindled to 247 in February of this year.

Citizens Advice chief executive, Gillian Guy, said:
"The drop in the number of problems reported to us about payday loans is good news for consumers.
"It demonstrates the impact a strong stance against irresponsible lending can have on people's lives."

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