High-Cost Credit and Debt Management

Lord Naseby Excerpts

Monday 10th October 2016 Lords Chamber

[Lord Young of Cookham]

The noble Lord is quite right. That is why we introduced a cap of 0.8% on payday loans. That means if you borrow £100 for a day, the maximum amount that can be paid in interest is 80p.

[Lord Naseby (Con)]

This review being undertaken by the regulator, the FCA, is very welcome. Nevertheless, it is not just cold calling, is it? Advertising is allegedly controlled but I watched an advertisement last night on television that was highly questionable. Is it not a matter of bringing together all the authorities—the Advertising Standards Authority, the FCA and other direct selling bodies—to have not just a review but an action plan to sort this out? Many elderly people are being duped out of thousands of pounds. Is it not time we really took action on this issue?

[Lord Young of Cookham]

I understand the strong feelings held by many noble Lords on this subject. As I said, in this year’s Budget, a large sum of money was identified to help vulnerable people and enable them to stop these sorts of calls being made. On cold calling by debt management companies and credit companies, there is a code they must abide by. If they break the code they can be fined. Last month, one payday loan company had to repay £34 million in redress because it broke those guidelines.