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'Tougher rules' for payday firms

Tougher controls on payday lenders have been unveiled by the City regulator today as it sets out plans to oversee the consumer credit market from next year.

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People 'will turn to illegal lenders' without payday loans

Russell Hamblin-Boone, chief executive of the Consumer Finance Association (CFA), which represents short-term lenders, argued that more people would turn to illegal lenders if the cost of credit were capped and defended payday loans saying companies were already checking customer's ability to repay.

Responsible payday lenders apply the same level of expertise to assessing creditworthiness as banks and credit card providers, including carrying out credit checks on new customer applications.

Modern technology means that this can happen very quickly. Our members check thousands of pieces of data during their affordability assessments, but the customer is not asked thousands of questions. That doesn't mean the checks aren't being carried out.

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