Asked by: Katie White (Labour - Leeds North West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will take steps to regulate the level of interest rates offered by loan companies on daytime television; and what steps she is taking to protect vulnerable consumers from high-cost credit.
Answered by Emma Reynolds - Economic Secretary (HM Treasury)
Lenders offering high-cost credit are regulated by the Financial Conduct Authority (FCA). This oversight ensures that lending practices are fair and that consumers are protected.
In 2013 the Government placed a duty on the FCA to implement a price cap for high-cost short-term credit products. The price cap came into force in 2015 and ensures that consumers using these products will never repay more than 100% of the principal in interest, fees, and other charges.
Lenders are also required to follow the FCA’s rules on promotions and adverts, where non-compliance could lead to fines. The FCA requires that all adverts and other promotions must be clear, fair, and not misleading.