PM challenged on loan ‘rip off’

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Sheffield MP Paul Blomfield has urged the Prime Minister to back his proposed charter to control ‘rip-off’ payday lenders.

The Labour Central MP put David Cameron on the spot during Prime Minister’s Questions in the House of Commons.

The move followed the launch of a proposed charter by Mr Blomfield and consumer groups and charities.

The charter is supported by some Conservative and Liberal Democrat MPs and goes further than rules proposed by the Financial Conduct Authority.

Speaking in the House of Commons, Mr Blomfield said: “We will have all heard from constituents who, while struggling to make ends meet, have taken out payday loans and then found themselves trapped in spiralling debt – with excessive charges and escalating interest.

“Yesterday, all the major national consumer and debt advice organisations came together in Parliament to launch a charter calling for tough regulation of payday lenders.

“The charter is backed by members from every party represented in the House. Will the Prime Minister add his support?”

Mr Cameron said he ‘congratulated’ Mr Blomfield on his efforts and ‘recognised the issue is a real concern’.

Mr Cameron said there was a ‘need for proper regulation’ and the Financial Conduct Authority was working on proposals.

The Charter to Stop the Payday Loan Rip-off has been developed by Mr Blomfield and is supported by some of Britain’s biggest debt, consumer and anti-poverty organisations.

Supporters include consumer organisation Which? and charities Citizens Advice, StepChange Debt Charity, Church Action on Poverty and the Centre for Responsible Credit.

After Prime Minister’s Questions, Mr Blomfield said: “I’m pleased the Prime Minister agrees we need proper regulation of payday lenders.

“The FCA should listen to him and back the charter to stop the payday loan rip-off.

“Mr Cameron’s words are welcome, but we need effective action to stop the payday loan rip-off.”

Measures proposed in the charter include a ban on lenders giving loans to people who can’t realistically afford to pay them back or rolling over loans and creating spiralling debt

■ People can back the charter by visiting Pay Day Loan Charter