A host of charities and campaign groups are today joining with Sheffield MP Paul Blomfield to launch a Charter to Stop the Payday Loan Rip-off.
Mr Blomfield and organisations including Which?, Citizens Advice, StepChange Debt Charity, Church Action on Poverty, and the Centre for Responsible Credit are gathering at the Houses of Parliament for the event.
The charter, created by the Sheffield Central Labour MP, is being launched in response to the Financial Conduct Authority’s recent proposals for regulating payday lenders.
An e-petition has been launched where people can back the charter and add their voice to the growing calls for tougher regulation of lenders.
Mr Blomfield said: “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 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.”
Church Action on Poverty and the Centre for Responsible Credit will also launch a joint report Stopping the Payday Loan Rip-off at tomorrow’s event in Parliament.
The charter is already being supported by MPs from the Labour Party, Conservatives, Liberal Democrats, SNP, DUP, Alliance Party, SDLP, Green Party and Plaid Cymru.
Wonga chief executive Errol Damelin has admitted his industry needs to be better regulated but claimed there was a danger of his company being used as a ‘political football’.
Sign the petition at Change
Proposals to stop lenders ‘trapping people in spirals of debt’
The Charter to Stop the Payday Loan Rip-off claims ‘payday lenders are exploiting millions of people across the UK, trapping them in spirals of debt’.
The charter includes a series of proposals to control lenders.
■ Stop hidden or excessive charges
■ 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
■ Require lenders to promote free and independent debt advice, and ensure they co-operate with other services to help people get out of debt.
■ Stop them raiding borrowers’ bank accounts without their knowledge and leaving them in hardship
■ Stop irresponsible advertising and instead provide clear and transparent information