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UK News

Christians Against Poverty welcomes payday loan charges fall

by Aaron James

The charity, which has helped thousands of people struggling with problem debt, is speaking after research conducted by the Social Market Foundation found the proportion of loans where consumers were charged extra fees on top of interest went down by half from 16 per cent in 2013 to 8 per cent in 2015.

The extra fees include late repayment fees, among others.

The reduction comes after a Financial Conduct Authority clampdown in 2015, which now forces lenders to carry out tighter affordability checks and puts a cap on the overall cost of a payday loan.

The cost cap on loans appears to have had an impact, and someone borrowing £200 for 30 days would pay £36 less under the current average market prices than they would have done in 2013.

Speaking to Premier John Kirkby, founder of Christians Against Poverty, said: "We're absolutely delighted.

"We campaigned for many years along with many others to see this legislation come in and the impact immediately was the reduction of companies offering payday loans, and now it's more encouraging to see the ones that are left are reducing their charges very significantly.

"It's still not great and we will continue to stand up and judge fairly and defend the clients that we help across the UK who get into difficulties with these payday lenders."

Listen to Premier's Alex Williams speaking to John Kirkby:

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