TWO bishops have accused payday lenders of unleashing a "tidal
wave of misery" by lending to the poor and trapping them in
debt.
In a letter to The Times on Wednesday, the Bishop of
Ripon & Leeds, the Rt Revd John Packer, and the Bishop of
Sheffield, the Rt Revd Steven Croft, said that the financial
regulator, the Financial Conduct Authority (FCA), must stop payday
lenders from giving loans to people who could not pay them
back.
The letter, which was also signed by the Moderator of the United
Reformed Church General Assembly, the Revd Dr Michael Jagessar, as
well as officials of Christian charities, including Church Action
on Poverty, urged the FCA to prevent payday lenders from levying
"hidden or excessive" charges on customers and "raiding borrowers'
bank accounts without their knowledge and leaving them in
hardship".
They wrote: "The high-cost lending industry has proved to be
incapable of effective self-regulation - it is now time for
Government and regulators to step in and offer consumers the real
protection against irresponsible lending practices that they
deserve."
The letter also warns that the move from fortnightly payment of
benefits to monthly - part of the Government's Universal Credit
reforms - may be exploited by unscrupulous lenders.
The Chancellor, George Osborne, announced on 25 November that
the Government would cap the interest that lenders were allowed to
charge - a U-turn for the Coalition, which had previously rejected
Labour calls to impose such a cap.
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