Plans for a cap on the amount that payday lenders can charge their customers have been announced by the City regulator.

Payday loan rates should be capped at 0.8% a day of the amount borrowed, said the Financial Conduct Authority (FCA).

And in total, no one will have to pay back more than twice what they borrowed.

The payday industry said the changes - due in January 2015 - would mean more people turning to loan sharks.

www.bbc.co.uk/news/business-28305886

Why do PayDay loan firms charge so much?
Because their customers are high risk, and probably won't pay back !

They are sometimes desperate rather than stupid.

honey!oh sugar sugar. wrote:
They are sometimes desperate rather than stupid.

Maybe.

But ... the new legislation will stop many PayDay lenders from lending at all (so where will the desperate go then?)

Shot themselves in the foot (again) !

In The Know wrote:
honey!oh sugar sugar. wrote:
They are sometimes desperate rather than stupid.

Maybe.

But ... the new legislation will stop many PayDay lenders from lending at all (so where will the desperate go then?)

Shot themselves in the foot (again) !


I agree. It is treating the symptom rather than the cause.

honey!oh sugar sugar. wrote:
I agree. It is treating the symptom rather than the cause.

IF these people paid what they owe - on time - they would not face interest on interest / roll over fees etc ... but then again, if they paid what they owe - on time - they would not be blacklisted and have to resort to these firms in the first place !