Charities and MPs launch new Charter on irresponsible lending

By agency reporter
October 15, 2013

Today (15 October), a major new initiative to tackle predatory and irresponsible payday lenders was launched in Parliament.

The ‘Charter to Stop the Payday Loan Rip-off’ is a response to recent proposals from the Financial Conduct Authority (FCA) for regulating payday lenders. The proposals are welcome but do not go far enough. The Charter lays out what needs to be done to regulate these lenders properly.

The Charter has been created by Church Action on Poverty in partnership with an influential cross-party group of MPs and some of Britain’s biggest debt, consumer and anti-poverty organisations – including Which?, Citizens Advice, StepChange Debt Charity and the Centre for Responsible Credit.

Church Action on Poverty has published a report to accompany the Charter, and set up an e-action which allows supporters to call on their MPs to back the Charter. Anyone interested in reading the report or taking part should visit

Niall Cooper, Director of Church Action on Poverty, said: “Payday lending, based on charging extortionate interest rates and extorting money from the poor through unfair and predatory lending practices, has no place in society. It is the modern-day equivalent of usury, which is strongly condemned within virtually all religious traditions. We urge the FCA to seize this opportunity to provide real protection to poor and vulnerable customers from companies who are currently ripping them off.”

Added Paul Blomfield MP, who has developed the Charter: “Payday lenders are ripping off millions of people, trapping them in spirals of debt. The FCA’s proposals for regulation are a step in the right direction, but they don’t go far enough. We want members of the public, MPs, councils and charities to back the Charter and join our call for tougher regulation and enforcement. If this ‘once in a generation’ opportunity is missed, payday lenders will be able to carry on exploiting people.”

At the launch in Parliament there will be brief contributions from each of the supporting organisations, as well as the Chairs of the All-Party Parliamentary Groups on Debt and Personal Finance, Financial Education and Credit Unions, Yvonne Fovargue MP, Justin Tomlinson MP, and Damian Hinds MP. There will also be contributions from Lord Mitchell and Adrian Bailey MP, Chair of the Business, Innovation and Skills Select Committee.

Full text of the Charter to Stop the Payday Loan Rip-off:

We believe irresponsible payday lending and other high-cost credit is damaging the health and wealth of our country. Payday lenders are exploiting millions of people across the UK, trapping them in spirals of debt, and the problem is getting worse.

Payday lenders are breaking promises they made in their own customer charter. Self-regulation has failed. We call for effective regulation of payday lenders and high cost credit, which is properly enforced, to:

- Stop them giving loans to people who can’t realistically afford to pay them back
- Stop them repeatedly rolling over loans and creating spiralling debt
- Stop hidden or excessive charges
- Stop them raiding borrowers’ bank accounts without their knowledge and leaving them in hardship
- Stop irresponsible advertising and instead provide clear and transparent information
- Require lenders to promote free and independent debt advice, and ensure they co-operate with other services to help people get out of debt.

We also want action to support the growth of credit unions and other forms of more responsible lending; we want banks to increase the availability of credit to people on low and middle incomes; and we want new research undertaken now on capping the total cost of credit.


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