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Clampdown on payday lenders begins

Payday lenders will have to operate within tighter restrictions in a bid to stop them from collecting vast amounts of cash in interest repayments. Controversial companies like Wonga will not be allowed to roll over loans more than twice.

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Tougher rules on payday lenders take effect

Controversial practices like rolling over loans more than twice will be banned in a clampdown on the predatory practices used by payday lenders, according to the industry watchdog.

The payday loan industry is undergoing a competition investigation, with results due to be published next year. Credit: PA

The Financial Conduct Authority will also introduce obligatory warnings on adverts, so customers are aware of how difficult the problems caused by late repayments can be.

They will hen be led to the Government-backed Money Advice Service (MAS) for help.

The £2.8bn industry has come under fire for lending to people who have not been afford the repayments, meaning the loan is rolled over and the cost balloons.

Charity StepChange received nearly 14,000 cries for help last year from people who were struggling with five payday loans or more.

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