Firms offering high-cost short-term credit must now follow additional rules on rollovers, continuous payment authorities and risk warnings.

Rollover restrictions

Payday lenders and other firms offering high-cost short-term credit must now limit the extension of loans to two rollovers.

Regular payments

High-cost short-term lenders are now limited to two unsuccessful attempts to use a continuous payment authority (CPA) to take a repayment and cannot use a CPA to take a part-payment.  

Risk warnings

Firms offering high-cost short-term credit must now include a prominent risk warning on all financial promotions.

Further information

The Financial Conduct Authority (FCA)  took over regulation of the consumer credit market on 1 April 2014.  The FCA introduced other rules that high-cost short-term credit lenders must follow – see final rules for consumer credit firms.  

Further details on the tougher rules for payday lenders are available on the FCA website.   

Source: FCA

Payday Loan Survival Guide

Govan Law Centre have published a free 'Payday Loan Survival Guide' for consumers across the UK. The guide explains how consumers can take back control of their finances, challenge unfair interest and charges, stop payday lenders from emptying their bank accounts, and pay back debts legally due on a reasonable and affordable basis. The guide has been written by GLC's Principal Solicitor, Mike Dailly.