News / MSP wants tightening of payday loan regulations
SHETLAND MSP Tavish Scott has backed calls for regulations governing payday loans to be tightened further.
Over 15 per cent of people who contacted the debt advice charity StepChange from Shetland had a payday loan debt, with an average balance of £178.00.
In January last year, the Financial Conduct Authority introduced new limits on what borrowers had to pay back, with the daily rate of interest unable to go beyond 0.8 per cent and the total cost capped at 100 per cent of the amount borrowed.
However, StepChange – which gives free expert advice – believe the regulations have not “fixed” issues with payday lending.
Scott called on locals to contact the charity if they feel they are being shortchanged.
“Payday loans can often seem like the only option, but we need to see better regulation to stop families and individuals falling into a cycle of financial difficulties,” he said.
“I support the calls for a review of the payday lending cap but in the meantime would encourage people in Shetland who need advice to contact StepChange.”
StepChange’s public affairs officer in Scotland James Stewart, who originally hails from Shetland, said there is “still work to be done” on payday loans.
“There is also a clear and immediate need for the Government to examine more affordable forms of borrowing for financially vulnerable people, who are often left with nowhere else to turn in their hour of need,” he said.
“Debt really can happen to anyone. If you are borrowing to cover your household bills, or stuck in a cycle of minimum payments, the time to act is now.”
To contact StepChange, telephone 0800 138 1111.
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