Crackdown on rollover doorstep loans, store card and catalogue debt in victory for The Sun
The City watchdog has issued new rules on what doorstep loan, store card and catalogue debt firms can do
DOORSTEP loan firms will have to make the cost of rolling over borrowing clearer to customers, under new rules unveiled by City watchdog today in a victory for The Sun.
Firms have also been warned about contacting potential customers who have not applied for loans.
Although, the Financial Conduct Authority has ruled out imposing a cap on the cost of borrowing for doortep loan sector.
The new rules come into force from tomorrow but firms have three months to make sure they are fully compliant with them.
The FCA has also announced store and catalogue firms will also have overhaul the way they advertise buy now, pay later offers.
Lenders will also have to do more to help customers in debt, including allowing customers to reject credit limit increases and helping those who cannot afford to repay more quickly.
In March, The Sun launched its Stop The Credit Rip-Off campaign calling for a crackdown on high cost credit, including a cap on rent-to-own and doorstep loans firms.
In May the FCA revealed plans to cap rent-to-own firms and overhaul overdrafts and tighten rules for doorstep lenders.
Last month, the FCA confirmed that rent-to-own firms would be stopped for charging hundreds of thousands of customers more than double for essentials like beds, cookers and sofas.
The FCA also announced a ban on banks charging rip-off overdraft fees today.
Banks will have to charge one single interest rate for overdrafts and help customers with recurring overdrafts.
The Financial Conduct Authority said the changes would help "millions of people who use an overdraft, particularly the most vulnerable."
Debt charity StepChange estimates that last year alone, 1.4million lower-income households resorted to high-cost credit like rent-to-own agreements, payday and doorstep loans, up from 1.1million in 2016.
We provided advice on the alternatives to high cost credit, explained the steps you can take to get out of debt and revealed how you might be able to get a refund on a doorstep loan or high cost credit agreement.
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