New consumer credit rules confirmed

New consumer credit rules confirmedThe Financial Conduct Authority (FCA) has confirmed changes to legislation covering the UK consumer credit market.

It is expected the new laws will affect around 50,000 businesses and will come into force on April 1st 2014.

One of the key changes will impact on providers of payday loans and allow the FCA to ban any misleading advertisements created by payday lenders. There will also be a requirement for stricter affordability checks to ensure borrowers are capable of making repayments on such products.

Martin Wheatley, the FCA’s chief executive, explained the new rules are designed to protect consumers and ensure firms to not take advantage of those in a vulnerable financial position.

“Millions of consumers access some form of credit each day, from paying for everyday goods by credit to taking out a payday loan.  We want to be sure that the market works well when people need it – whether that’s for one day, one month or longer,” he added.

The FCA was created in 2013 as a partial replacement for the Financial Services Authority.

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