Evidence collected demonstrated that pay day loan companies were not treating customers fairly. They were breaking regulations and guidance regarding responsible lending.
Citizens Advice had concerns around the glossy advertising practices of pay day loan lenders, which were often irresponsible and misleading, masking the reality of debt.
The CAB service wanted pay day lenders to be properly regulated and to stop them using irresponsible lending tactics.
How did they achieve this?
In 2012 the industry introduced a good practice customer charter in their codes of practice.
•Clients who had experience of pay day lenders were encouraged to take the pay day loan survey
•This demonstrated pay day lenders were not adhering to the charter and tougher rules were needed for pay day lenders
Our evidence was then given to the government and press which raised awareness about payday loans and consumers rights. Supporters were advised to get 'Mad about the ad' and report misleading advertisements to the Advertising Standards Agency.
New Rules were put in place for for pay day lenders and the Financial Conduct Authority (FCA) has now taken over the regulation of the industry and immediately carried out an in-depth review into payday lenders’ debt collection practices. Citizens Advice also agreed to share our evidence of payday lender behaviour with the FCA so they can take action to protect consumers.