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Bishops keep up the pressure on payday ‘account-raiders’

06 December 2013

PA

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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