We are publishing our response to the Call for Input into our review of high-cost credit products. This includes our decision on the future of the high-cost-short-term credit (HCSTC, or payday lending) price cap.
- Technical annex (PDF) – our analysis of credit reference agency (CRA) data of consumers using high-cost credit products
- Price cap research main report (PDF) – findings of our survey of 1,800 consumers on their experiences of HCSTC products
- Price cap research technical report (PDF)
In this Feedback Statement we set out our:
- decision to maintain the HCSTC price cap at its current level, with a commitment to review it within 3 years to ensure that it remains effective
- findings about high-cost credit products, including overdrafts
- priorities for the next stage of the review, which will focus on overdrafts, rent-to-own, home-collected credit and catalogue credit
Erratum: In the version of FS17/2 published 31 July 2017, we incorrectly referred to fees and charges for unarranged overdrafts under Lloyds Banking Group’s revised pricing model announced in July 2017. Changes have been made to paras 4.22, 4.40 and 4.64, and Figures 4.1 and 4.2 to remove or amend these references.
Who this applies to
This feedback statement will affect:
- consumer credit lenders that provide HCSTC (Section 2), other types of high-cost credit lending (Section 3) or overdrafts (Section 4)
- trade bodies representing these firms
- other consumer credit firms and trade bodies
- consumer organisations
We will investigate the issues outlined in the paper further and for those issues where further research shows intervention is needed and justified we aim to consult in Spring 2018.