- 9 updates
Prior to announcing proposals for a new cap on the costs of taking out loans from payday lenders, the FCA conducted a survey of 2,000 representative customers.
The results identify the level of financial difficulties those borrowing endure.
The head of the Consumer Finance Association, which represents the industry, has urged people to consider the full consequences of a crackdown on the high costs and charges enforced by payday lenders.
For a lot of people borrowing from a payday lender "is not a good idea" and they can find themselves getting further into debt, a finance chief told Good Morning Britain.
Financial Conduct Authority (FCA) chief executive, Martin Wheatley, admitted the interest cap on payday loans would "restrict the availability of loans to some people" but it would keep customers away from toxic debt.
The Financial Conduct Authority's proposals for a cap on payday lending mean that from January interest and fees on new loans, including those rolled over, must not exceed 0.8% per day of the amount borrowed.
Payday lenders will lose £420m in revenue a year as a result of the rate and costs cap being brought in from January 2015, ITV News Business Editor Joel Hills has tweeted:
The Financial Conduct Authority's cap on the interest charges and fees set by payday lenders will ensure customers will never be hit with loan costs higher than the amount borrowed.
ITV News Business Editor Joel Hills has tweeted the FCA's key proposals:
The Financial Conduct Authority has announced plans to impose a price cap on payday lenders from January 2015.
The FCA confirmed earlier this year it planned to cap the total cost of credit for all payday loan firms from early next year following pressure from the Government.
Restrictions on the amount payday loan companies can charge on interest are expected to be announced by the industry watchdog later today.
The Financial Conduct Authority (FCA) will impose severe restrictions on the amount of interest which each company can charge, as concerns over the excessive cost of fast credit spiral.
FCA chief executive Martin Wheatley will set out details of an industry consultation which will lead to a cap being in place by the start of next year.
Payday loans have proved a controversial business model, with many accusing companies like Wonga of "legal loan sharking" and exploiting those struggling to make ends meet.
Latest ITV News reports
A new crackdown on loans costs aims to protect customers, yet will put 30 per cent of lenders out of business and be cheered by loan sharks.