Payday Loans

Sounds Like the FCA Needs to Grow a Pair

Things are really kicking off in the world of payday loans this week. Only days ago, we reported that the Financial Conduct Authority (FCA) were enforcing new regulations within the industry to clamp down on some of Instant Lolly’s exploitative and morally ambiguous counterparts. Today, however, it appears that the FCA’s superhero status was short-lived indeed.

The consensus is that these new regulations, while going some way to addressing issues within the payday loans industry, are a drop in the ocean in the grand scheme of things. The issue is this: the Business, Innovation and Skills committee called for tough measures – and the FCA failed to deliver.

First on the agenda: the number of times a loan can be rolled. These new principles are essential for the payday loans industry, paving the way for mutually responsible lending – the current insufficiency of which is maligning the industry as a whole. The FCA’s supposedly industry-shaking regulations included a limit on the number of times a loan can be rolled over – with a maximum of two (that’s one more than proposed by the BIS committee). At Instant Lolly, we aren’t fazed by these recent restrictions. We’re developing new technologies to ensure that no-one can ever borrow more than they can comfortably repay – making rolled loans a non-issue.

One of the primary debates surrounding the industry is that of freedom of expression vs. numerous moral objections. There’s a demand right now for payday loan ads to be banned from kids’ TV – on the basis that children are being desensitised to these undeniably adult and controversial concepts too early. The sad fact is that, until we’re able to purge the industry of irresponsible lenders, this stigma is unlikely to shift.

Payday loan companies are generally reviled as a gang of crooked profligates, determined to exploit the financially vulnerable. True enough, many companies in this sector far from prioritise customers’ financial well-being – but we’re proud to say we’re completely misrepresented by these assumptions. In actual fact, our entire lending process seeks to protect the customer’s interests every step of the way – and promote reasonable and responsible lending.

One of the FCA’s greatest and most recent faux pas was their failure to crack down on lenders using a continuing payment authority – essentially entitling them to clean out borrower’s accounts. This financial raiding is the very reason lenders have such a bad name – and hence the very reason that such an injunction is essential for customers’ protection.

The issue of real-time data sharing is a red hot topic in the loan sphere right now – and something the FCA have spoken about at length. Unfortunately, that’s just about all they’ve done on that front. A database like this has the potential to revolutionise our industry, breaking some serious ground on the customer care front. It’s claimed that a major part of the FCA’s strategy moving forward will be to implement this regime and, as a result, give this market a much-needed shake-up – but many feel this is something we should be seeing already and that the FCA is lacking in urgency, clout, or both.

As we’ve expressed before, real-time databases would make a colossal difference to our process – with instant payday loans actually becoming instantaneous. The bottom line is this – the more information lenders and brokers have access to, the better every customer’s experience will be.

The fact remains that the payday loans industry, while thoroughly misrepresented by public opinion, is well overdue an upheaval. At Instant Lolly, we’re doing everything we can at our end to keep lending the way it should be – trustworthy and transparent – and together, we can clean up the industry for good if these ‘authorities’ finally man up and dish out some serious financial justice.