Council Welcomes Tough New Rules on Payday Loan Companies

Cheshire East Council leader Councillor Michael Jones has welcomed tough new rules which could see some payday loan adverts banned.

PayDay Loans MoneyThe Financial Conduct Authority (FCA) has proposed several new rules intended to protect consumers from the scourge of high-interest debt, which often results from taking out a loan with a payday lender.

Cheshire East has taken its own practical steps to protect residents by banning access to the top 50 payday lender websites in its public buildings – the first Council in England to do so.

Under the plans, the FCA would force payday lenders to place ‘risk warnings’ on their adverts to advise borrowers about the dangers of debt. It could also be able to ban any loans, or adverts, that it did not approve of.

Cllr Michael JonesCouncillor Michael Jones, Leader of Cheshire East Council, said:
“I have always said these companies and their rates must be restrained. We want to protect the most vulnerable of people from falling into the trap of borrowing money at astronomical rates of interest.

Whilst I believe in private enterprise and individual choice, businesses should operate in a responsible way – and I do not believe these companies are. Their practices are obscene.

We were one of the first councils to ban access from council PCs to payday lender websites, a move I am glad to see has been picked up by other local authorities.

We took this action after being inundated by complaints from the public. We’ve also received reports from Citizen’s Advice that they are now dealing with people under 18 who have been given loans and some people who may even have been intoxicated when they signed up.

I very much welcome the FSA’s proposed new rules, which would go a long way to protecting consumers and, as community leaders, we should be looking to bring pressure to bear on the payday loan industry wherever we can.”

Information courtesy of Cheshire East Council