How Has the FCA Changed the UK Payday Loans Market?

When the OFT (Office for Fair Trading) were responsible, the payday lending market was inefficiently regulated.  Although firmsnominally abided by the terms of the Consumer Credit Act, they largely acted as if there were no regulations at all.  The technology of applying online, the lack of affordability checks and the fact that borrowers could easily refinance the loans all meant that it was easy for borrowers to start out with a small loan which could spiral out of all control once interest charges and late fees were added.  Some payday firms also had unscrupulous and unethical business practices.  For example, they would often threaten to get the money repaid as soon as possible or encourage the borrower to take out another larger loan.

Payday loan regulationsbecame more robust when the FCA took over in April 2014.  Apart from ensuring that all consumer credit firms were registered with them, the …