The FCA have today released their long awaited findings from their review into relending by firms offering high-cost credit.
Commenting on the findings, Adam Butler, Public Policy Manager at StepChange, says: “Today’s report is a timely reminder that high-cost credit products like payday loans, home credit and guarantor loans often put people at significant risk of financial harm. Since the start of the pandemic, our research has found nearly one million people have used high cost credit products as a safety net to meet everyday living costs. While the FCA’s previous work into high cost credit has delivered great steps forward, it’s evident that there is more work to be done to address the drivers and sources of the harm caused by high cost credit use.
“With support schemes and payment holidays winding down, it’s more vital than ever we see fair and sustainable alternatives to these products developed as soon as possible. The government must act quickly to develop a national no interest loan scheme, which would provide a mechanism to influence access to affordable credit more directly.
“In the meantime, the FCA can further curb the harm caused by high-cost credit products by tightening lending rules, looking at harder at the product features that can trap people in debt and improving forbearance measures.”