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Report calls to restrict payday loan adverts

Almost three quarters (74%) of parents want payday loan companies to be banned from broadcasting television and radio adverts before the 9pm watershed, according to a new study.

Report calls to restrict payday loan adverts Credit: PA

The research found that over one third (34%) of children find the adverts to be fun, tempting or exciting, and this group were significantly more likely to say they would consider using a payday loan in the future.

The statistics form part of a report by The Children's Society which calls for restrictions on loan advertising to join those already in place to protect children from adverts for gambling, alcohol, tobacco and junk food.

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FCA reveals financial hardship of average loan users

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.

FCA is proposing an initial cost cap of 0.8 per cent per day of the amount borrowed for new loans or loans rolled over. Credit: FCA
Currently 1.6 million people in the UK take out 10 million loans valued at a total £2.5 billion. Credit: FCA

Crackdown on payday loan costs will hurt 'many people'

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.

Anyone who thinks that a price cap is good news for borrowers should have a thought for those many people who will be turned down for loans because the best lenders will have to reject those with the worst credit records.

We support a cap that allows the industry to operate profitably with the right protection in place for vulnerable people. With new regulations and tighter affordability checks, critics must now face up to the fact that most people use, need and like short-term credit and the measures in place are more stringent than for any other form of consumer credit.

– Russell Hamblin Boone, chief executive of the Consumer Finance Association

FCA: For lots of people a payday loan 'is not a good idea'

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.

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New costs cap will lose payday lenders £420m a year

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:

Key proposals of new cap on payday lenders

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:

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