By Claire West
Speaking ahead of a government summit looking at widespread problems in the payday loans industry, Gillian Guy, Chief Executive at Citizens Advice, has called for tough new rules to stop irresponsible advertising and end celebrity endorsement of financial products.
Gillian Guy said:
"We need to see tough action on advertising, with new rules brought in which would end wall-to-wall advertising on daytime TV and stop the use of glossy celebrity endorsements which conceal the misery of life in debt. Much more needs to be done to make the cost of loans and consequences of late repayments clear, and to end the focus on speed rather than affordability.
"Every day, Citizens Advice Bureaux help people who have been pushed into serious financial trouble by the reckless actions of the payday loans industry. Our evidence shows that payday lenders are failing to treat people fairly, breaking 12 of the 14 promises they laid out in their customer charter.
"It's good that the Financial Conduct Authority has already said that high-cost and payday lenders will be a priority when it takes over its new role. The FCA must have robust powers to tackle irresponsible practice where it is found, and this summit is a welcome opportunity to hold payday lenders to account and look at problems.
"While times are tight the demand for small, short-term loans will remain high. The blizzard of benefit changes coming up could mean a jump in the number of people turning to payday lenders, and we want to see high street banks step up and offer micro-loans with clear, fair conditions to fill this gap in the market."
