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| Payday loan hardship cases up 42%, says StepChange charity | Payday loan hardship cases up 42%, says StepChange charity |
| (1 day later) | |
| The number of people struggling with payday loans has risen by 42% in the past year, according to a debt charity. | The number of people struggling with payday loans has risen by 42% in the past year, according to a debt charity. |
| The charity StepChange is asking the City regulator to take further action to protect consumers who suffer from such financial hardship. | The charity StepChange is asking the City regulator to take further action to protect consumers who suffer from such financial hardship. |
| It said the Financial Conduct Authority (FCA) should impose an even stricter cap on payday loan costs. | It said the Financial Conduct Authority (FCA) should impose an even stricter cap on payday loan costs. |
| The FCA said it would study the idea, along with all the other responses to its current consultation. | The FCA said it would study the idea, along with all the other responses to its current consultation. |
| StepChange's latest figures suggest the number of people getting into difficulty as a result of payday loans is continuing to increase. | StepChange's latest figures suggest the number of people getting into difficulty as a result of payday loans is continuing to increase. |
| In the first half of 2014 it dealt with 43,716 consumers who were in trouble. That compares with 30,762 in the same period last year. | In the first half of 2014 it dealt with 43,716 consumers who were in trouble. That compares with 30,762 in the same period last year. |
| 'Crucial step' | 'Crucial step' |
| The FCA is already consulting on plans to cap the costs of payday loans. | The FCA is already consulting on plans to cap the costs of payday loans. |
| It has proposed, for example, that no one should have to pay back more than twice they original amount they borrowed. | It has proposed, for example, that no one should have to pay back more than twice they original amount they borrowed. |
| But StepChange said that the proposed cost cap should be tougher. | But StepChange said that the proposed cost cap should be tougher. |
| The FCA has also suggested a fixed fee of £15 if someone defaults on repayments. | The FCA has also suggested a fixed fee of £15 if someone defaults on repayments. |
| StepChange said the maximum should be £12, to bring it in line with default charges on credit cards. | StepChange said the maximum should be £12, to bring it in line with default charges on credit cards. |
| "While the FCA's proposed price cap is a crucial step forward, there is much work still to be done," said Mike O'Connor, StepChange's chief executive. | "While the FCA's proposed price cap is a crucial step forward, there is much work still to be done," said Mike O'Connor, StepChange's chief executive. |
| StepChange said it also wanted the FCA to examine other lending markets, including overdrafts, logbook loans, and doorstep lending. | StepChange said it also wanted the FCA to examine other lending markets, including overdrafts, logbook loans, and doorstep lending. |
| The FCA said research into those areas was already underway, and it could not comment further. | The FCA said research into those areas was already underway, and it could not comment further. |
| The consultation on a cap for payday loan costs closes on Tuesday. | The consultation on a cap for payday loan costs closes on Tuesday. |
| The FCA will make a final announcement on the size of the cap later in the autumn, and it will take effect in January 2015. | The FCA will make a final announcement on the size of the cap later in the autumn, and it will take effect in January 2015. |