Plans to stop payday lenders taking money from customer bank accounts and rolling over unpaid debts could reduce short-term, high-interest lending and cause companies to quit the market. Europe Economics, the FCA's consultants, estimates that the proposals, if effective, would cause 25-30 per cent of payday lenders to quit the marketplace, resulting in a reduction in payday revenue of up to £200m. Payday lenders such as Wonga typically advance relatively small sums for short periods, but at a high cost. "Payday lenders must not be allowed to drain money from a borrower's account," said Martin Wheatley, FCA chief executive. The Consumer Finance Association, which represents lenders, said it welcomed the FCA's plans, which it said would drive out irresponsible lending practices.
Source: http://www.ft.com/cms/s/0/e110b148-2bf4-11e3-acf4-00144feab7de.html?ftcamp=published_links%252Frss%252Fpersonal-finance%252Ffeed%252F%252Fproduct
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