The Financial Conduct Authority (FCA) has confirmed the new rules that will apply to how payday lenders and debt management companies treat their customers.
The regulations, which will be applied from April 1st, will include mandatory affordability checks for payday borrowers, while the FCA will have the power to ban any misleading adverts from payday lenders.
Martin Wheatley, the FCA’s chief executive, said: “Millions of consumers access some form of credit each day, from paying for everyday goods by credit to taking out a payday loan. We want to be sure that the market works well when people need it – whether that’s for one day, one month or longer.
“Our new rules will help us to protect consumers and give us strong new powers to tackle any firm found to be overstepping the line.”
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