16 Oct 2018
Britain’s financial regulator has fired a warning shot at payday lenders amid a rise in complaints about unaffordable loans and following the collapse of Wonga earlier this year.
The Financial Conduct Authority (FCA) said on Monday that it had sent a so-called “Dear CEO” letter to providers of high-cost short-term credit asking them to assess whether their creditworthiness assessments are compliant and whether borrowers should be reimbursed.
The watchdog has also told lenders to inform it immediately if the cost of compensating customers with grievances will leave firms unable to meet their financial commitments.
The warning comes amid an increase in complaints about unaffordable lending, including where so-called chains of loans, where an individual borrows repeatedly over an extended period, the FCA said.
– By Ben Martin, Reuters, 15 October 2018.
Link to Reuters.
You can claim CPD minutes for reading this article, by signing up to our CPD WalletFREE CPD Wallet